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EUROPE’S BUSINESS NEWSPAPER
FINANCIAL TIMES
No.30,624
Wednesday August 24 1988
D 8523 A
JAPAN’S HOPES
Takeshita’s modest
aims In Peking
Page 3
IIS
f
World N ews
Controversy
over Quayle
dominates US
campaign
Controversy over
Vice-President George Bush's ■
choice of Senator Dan Qoayle
as his miming mate for the
US presidential election in
November increasingly; rtrrniU
Embarrassing new charges
were made about the 41-year-
old Indiana Senator’s past, fol-
lowing allegations that he used
family contacts to avoid fight-
mg in Vietnam. Page 4
Burma protests
More than half a million people
took part in pe&ceftil demon-
strations against Burma’s 26*
year-old socialist Government.
Pages
Iran accuses Iraq
Iran alleged Iraqi forces were
massing for an attach on the
central Gulf war front, bat the
UN said the ceasefire was hold-
ing. Pages
Afghan dump blast
A Soviet spokesman confirmed
that an explosion took place
at an ammupt ioa dump at
Kilagay, north of Kabul. on
August ll. Be said there were
no fatalities atthougfarebel
sources said up to 600 died.
UN Cyprus talks
Greek-Cypriot President
George Vassilioo and Turkish-
Cypriot leader Rauf Denktash
had separate meetings with
UN Secretary-General Javier
Perez de Cuellar in Geneva.
Good atmosphere. Page 2
Bqfumbwa curfew
The Burundian capital, Bujum-
bura, was said to be under cur-
few following tribal massacres
In the north of the country
in which thousands died.
Angola taBts rsstsrt
Cuban, Angolan and Sooth
African delegate* arrived in
Uw Congolese capital, Braczft*
vttte. for a ffflfc rotted of US-
sponsored peace talks on
southern Africa. Page 3
Nopal toll i
The Nepalese authorities
revised the i r esti mat e of the
death toll in Sunday's earth-
quake to more than 1,000.
Another 200 people died in
northern India.- : -
Korsa talks dus
North and Soutfa Korea were
due to hold a private meeting
today at the border village of .
Panmunjom, in a bid to
arrange talks mi rale for
Pyongyang in next month's
Olympic games.
Floods Mt Burkina
Two peopfoirdxeidfied and
at least 4,500 made homeless
by torrential rains in the Sahe-
lian state of Burkina Paso.
SA Wimpy Bar bomb
At least 25 people were seri-
ously injured when a bomb
exploded in a Wimpy fast food
restaurant in the Smith Afri-
can city of .East London.
West ftsitk mavss
[ The Palestine Liberation
! Organisation saW ft would take
; responsibility for dvfl servants
! sacked when Jordan cut its
; \ ties with the Israehoccopied
• \ West Bank last month. Israel-
flo dash. Page 3
independence foam Moscow
at a rally in the Baltic republic
to ootnnxsnwde the 1939 _•
Nad-Soviet pact which brought
it under Sowtdoittrd.
Business Summary
Hearing on
BAT bid for
Farmers
postponed
INSURANCE regulators in
Kansas postponed for two days
the stark of a hearing on the
J5.Q5bn bid by BAT Industries
for US insurer Farmers Group,
triggering speculation on Wall
Street that a deal between the
two groups was about to be
BAT and Farmers themselves
sought postponement of toe-
hearing from the state’s insur-
ance department having been
in secret talks In California,
since late last wed.,
BRITAIN’S economy continued
to grow at an exceptional pace
into the three months to June,
according to official figures
published yesterday, reinforc-
ing fears that the economy was
growing too rapidly, leading
to inflation. Page 7
TM PBBTAT. H tfmW f nihtK -
tries, Britain’s biggest chemi-
cals company, winselltts
European silicones business .
to Rhdne-Pouienc, the state-
owned French group for £30m
($50.4m). Page 15
CAMBRIDGE ELECTRONIC
Industries, floated off by Dutch
electricals and electronics
group Philips in 1981, has
retained to its parent to buy
two US electronic component-
businesses for a total of about
354m. Page 15
HONGKONG and Shanghai
Banking Corporation, toe col
any*B biggest bank, which last
year acquired 14L9 per cent of
Midland Bank of the UK,
pushed up its interim dividend
following strong first-half prof-
its. Page 15
BEATRICE: Donald Kelly ;
flamboyant chairman of the
diversified food concern, is to
resign as head of th*> company
betook private in one of the
largest leveraged buyouts in
US corporate history two years
ago. Page 15
DEN NORSKS CredKfaank,
troubled roaw t tfincrmun i er -
-atel bank, announced aTatfical
res t r uc t u ring off the bank into
four main divisions and new
appointments to head them,
following NKrl5bn (3214m)
losses for 1S87 on loans and
securities. Page 17
STATOHc Norwegian state
oil company's financial prob-
lems were underlined when
it called for a state cash injec-
tion of at least NKxSbn (3429m)
to sustain operations at cur-
rent level. Page 7, page 17
SAMPO, Finnish insurance
group, plans to raise FMSTOm
(3220m) through a ane-for-two -
rights issue which w£D raise
its stare capital by 48 per emit
Page 17
APPLE COMPUTER has decen-
tralised its operations into four
autonomous divisions to bettor
handle its rated growth; it is
aiming 1 or sates c£ some gtifon
by. the early 1990s. Page 16-
TOOTSIE RoHIminrtries. Chi-
cago-based maker of tfretnla-
mous Tootsie RoB one of the -
best known sweets in the US.
plans to purchase New Jersey
bubble-gum maker, Charms.
Page 16
-DEERE, the world's largest
manufacturer of farm equip- .
wMit saw its recovery continue
in its third quarter with a rise
in net profits for the three
months to 381m up from
3255m in the same period last
year. Page 16 .
AUSTRALIA announced a
. rhawge in banking regulations
to remove the distinction .
between trading and savings .
banks, and reduce the amount
banks are required to phtoe
as low-interest deposits with
the central bank. Page 18
MARKETS
•tow Ywfc 1 un c haw
$1,079 (1-688}
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1994.13 (+391)
S&P Co«TH>
25791 (-1-033)
/
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Federal Funtfa
3-fnte Treasury sate
vWd: 7.37% (797)
Long Bond: 97 JL
(96V)
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FFr 6.4675 (650B)
SFr 1.8058 11.6115}
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World:
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Tokyo ■ -
pawwi aw 2791995
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Commerzhank
L442.1 (-25J1
Nwr YM lunrhHm e -
Cotnax _■ . -.- .
3441.6(4439)
Brant 15-day (Argus)
ST4.875 (-0278)
West Tax Crodv ;
S1597S (-OIB)(pc0
France to ease embargo on oil from Iran
By ten Davklaon In Parte
THE French Government is to
ease the 12-month-ted embargo
on ofl imposts horn Iran, by
totroducing a barte- system for
■swapping Iranian oil imports
against French exports.
It appears probable that
France will supply food and
agricultural products, which
are in short supply in Iran.
But ncMiw the rigfarila DOT
even the scale of the new bar-
ter arrangements have been
announced, -and they are not
expected to be settled for a lew
days. Until they are, the
embargo imposed on Iranian
oil imports at the beginning of
August 1987 remains in force. .
Moreover, the French Gov-
ernment remains extremely
guarded about the reasoning
behind yesterday's cryptic
announcement, which said
merely that the Government
'‘envisages in the next few
days softening the eri sting
regime governing Franco-Ira-
irian oil relations. In a frame-
work of compensation trade
deals".
Formally the embargo
remains m force, even though
diplomatic relations were
restored two months ago, and
the French Government has
not explained why it is still
holding out against the Irani-
ans on the ofl front, nor why it
has now derided to ease the
embargo.
Diplomatic relations were
broken off by Paris in August
1987 in a dispute with Iran over
alleged terrorist activities in-
France. They were restored in
June, after intense negotia-
tions by the former right-wing
Government of Mr Jacques
Chirac, which led to the
release during this spring's
French presidential election of
three French hostages held by
pro-Iranian terrorist groups in
the Lebanon.
The rupture was precipitated
in July last year by the refusal
of an Iranian embassy official,
Mr Wahid Gordii, to answer
accusations that he had been
involved in terrorist activities
in France in 1986.
Although the French Gov-
ernment has given no explanar
tirm of the cautiousness of its
easing of the oil embargo, two
factors seem to be at work.
The first is that a substantial
financial dispute, over a Slbn
Iranian loan to the French
Eurodif uranium enrichment
project, remains unresolved,'
and the French Government
has been reluctant to give
away any negotiating cards
prematurely. The second is
that France may have felt
obliged to make a gesture of
goodwill in response to the
Iran-Iraq ceasefire.
At all events, it appears that
Tehran has pressed hard for
new arrangements to facilitate
the import of food from France.
Shell gloomy an oil demand,
Page 82; Statoil seeks cash
injection, Page 17
Poland rejects
Walesa talks
By Latte Cofitt in Gdansk
THE POLISH leadership
accused this outlawed Solidar-
ity trade Tmkm jn Gdansk
its supporters nationwide of
hniiWng ]t at "strike gunpoint"
as thousands more workers
joined the widening labour
stoppages.
Solidarity in Gdansk
responded by appealing to the
International Red Cross to
send food , and blankets to
nearly 2,000 workers who it
said were now striking in the
shipyard and the port of
Gdansk. The authorities
refused to allow food for the
strikers to enter the shipyard
in an a t te mpt to force the men
to give in qtdckly.
But young Solidarity activ-
ists, knapsacks filled with
bread and sausage, were jump-
ing the fence su rro un ding toe
vast shipyard.
Mr Jerzy Urban, fire govern-
ment spokesman, said the
authorities would not negotiate
with Mr Lech Walesa, the Soli-
darity leader, to end the
strikes. Mr Walesa has been
together with his fellow stzik-%
ers since they baited work on
V<m^ h y meaning:
A curfew from 11pm last
night to 5am today was
ordered in the strike-bound
t ^ymfavng city of Jastrzebie
Jn southern Poland and in
other regions where strikes
were spreading. Solidarity
sources said four new mines
wait on strike yesterday, while
PAP, (he Polish news agency,
said the Andalusia min e in
another part of Silesia was
back working after strikers
were “ ur g e d" by fellow miners
to ret ur n to their jobs.
In the rectory of St Brygkia
Church in Gdansk advisers to
Mr Walesa said they were
determined to see through the
strike to the end.
Mr MtchnfV and Mr Tartwime
Mazowiecki, who advised Soli-
darity in 1980 and 1981, entered
the grounds before the
strike wave began and cannot
venture outside for fear of
almost certain arrest. They
remain in contact through
teenage couriers with the
strike leadership under Mr
Alojzy Szablewski inside the
shipyard.
4 Shipyard workers sat on
'tools playing cards and on the
gm nnd nhatting as family and
Continued on Page 14
As General Wojciech
Janzzel&ki of Poland, above
left, faces a wave of strikes
throughout Poland and
growing unrest among work-
ers, Eastern Europe as a
whole is showing signs of
restlessness and an unwill-
ingness to embrace fully the
reforms of Mr Mikhail Gorb-
achev, the Soviet leader.
Despite Moscow's peres-
troika Romania's President
Nicolae Ceausescu, above
right, is still pushing on
with a Stalinist-ran econ-
omy. And Mr Todor Zhivkov
of Bulgaria, left, is di g gin g-
in and resisting the reforms.
Moscow’s neighbours grow restless
hi Vtonfca
WHEN Mr Mfkhafl Gorbachev
returns- from his summer holi-
day. he faces serious chal-
lenges to his reforms - not
only from within his owu party
but from his socialist neigh-
bours.
Eastern Europe, so long
Moscow's Achilles heel, is
becoming restless for change.
And the pressure Is coming
from below.
hi the space of a month, Pol-
ish workers have again
resorted to strikes and are call-
ing for the legalisation of the
Solidarity trade union. Tho u-
sa nds of y oung Czechoslovaks,
suffocated by 20 years of politi-
cal and cultural stagnation,
surprised even toe most scepti-
cal by marching in Prague last
Sunday night. In the Old
Town, they chanted the name
of Alexander Dubcek, toe party
leader mercilessly ousted by
Warsaw Pact tanks on August
21 1968.
More and more people in
neighbouring Hungary are
openly criticising the destruc-
tion of villages inhabited by
ethnic Hungarians in Romania.
Mr Todor Zhivkov, Bulgaria’s
leader, h aving sacked Mr Chur
domir Alexandrov, his refonn-
wrfwdad deputy in charge of
economic and party policy, is
digging in and resisting Gorba-
chev-style reforms.
President Nicolae Cewusescn
of Romania doggedly pashes
on with a Stalinist-run econ-
omy. Mr Erich Honecker. East
Germany's party leader, pon-
ders what to do with the grow-
ing influence of the Protestant
churches but shies away from
introducing any substa n tial
political or social c hanges .
Such a picture must greatly
disturb the leadership in
Moscow, not least because the
recent events taking place in
Eastern Europe, while not fol-
lowing any coherent pattern,
have one thing in common.
Since the leaderships cannot
match, or are unwilling to
Continued on Page* 14
GM seeks
to regain
leadership
in Europe
By Kevin Done, Motor
Industry Correspondent, in .
London
GENERAL MOTORS of the US
unveils today its new range of
Opel Vectra/Vauxhall Cavalier
saloons and hatchbacks in an
attempt to wrest back leader-
ship from Ford of the hotly
contested and lucrative mid-
range segment of the European
car market
The new range, developed at
a cost of about 3800m, will play
a vital role in sustaining GM*s
European recovery and is cru-
cial for its success in the UK,,
especially in toe all-important
British fleet market, and in
West Germany, the biggest
markets for mid-range cars in
Western Europe.
The Opel Vectra/Vauxhall
Cavalier, which replaces the
first front-wheel drive Opel
Ascona/Vauxhall Cavalier
launched in 1981, is the result
of a six-year design and devel-
opment programme at the
technical development centre
of Adam Opel, GM's West Ger-
man subsidiary, which now
carries out aQ GM’s European
car development.
tt will be produced at three
locations in Western Europe,
at toe Opel plants at Antwerp
in Belgium and at Russelsheim
in West Germany, and at the
Vauxhall assembly plant at
.Luton in toe UK, where £30m
($50m) has been invested in
new plant and equipment
As part of the Vectra devel-
opment prog ramme, gm claims
to have broken new ground in
European motor industry
labour relations with toe intro-
duction of a four-year labour
agreement at its Antwerp
plant, which win dramatically
increase the competitiveness of
the Belgian assembly
operations.
GM has consolidated its two
Continued on Page 14
W German
trade
surplus
shows sharp
increase
By David Goodhart in Bonn
WEST GERMANY'S trade
surplus rose sharply in June
lessening the chances of a
lower trade or current account
surplus for the year and thus
potentially renewing pressure
on the Bonn Govern-
ment - which is committed to
reducing the surpluses - to
further stimulate domestic
demand.
The statistics office in Wies-
baden could think of no special
factors inducing the unex-
pected jump in the surplus
from DM10.3bn (S5.4bn) in May
to DMl4J2bn in June.
Exports rose 19 per cent,
compared with June 1987, and
imports were up 69 per cent
The annual trade and cur-
rent account surpluses of toe
world’s biggest exporter are
now unlikely to shift far from
the 1987 figures of DMllSbn
and DMSObn respectively.
Most economists had been
lo oking for a June figure of
around DMlObn and one com-
mented: “It looks as if we did
not take the buoyant export
order data seriously enough."
The weakening of the
D-Mark against the dollar,
which gathered pace in mid-
June, should initially have had
toe effect of reducing the sur-
plus.
The West German authori-
ties are now in the difficult
position of not wanting any
farther weakening in the
exchange rate but equally not
wanting to choke off domestic
demand with another interest
rate rise.
Professor Norbert Walter,
senior economist at Deutsche
Rank in Frankfurt, said that
the combination of the real
depreciation of the D-Mark in
toe European Monetary Sys-
tem over several years and the
recent investment boom in
Europe lay behind toe jump in
the surplus.
He added that the West Ger-
man Government was in a
strong position to head off crit-
icism, especially from toe US,
having just spent 40 per cent of
its dollar reserves (DMSSbn)
trying to hold down the dollar
rise and with private consump-
tion continuing to grow at
per cent a year.
• The Bonn Government
has reduced the number of
undertakings in which it has a
direct or indirect interest from
808 to 499 since 1982, bat has
raised only DM6.6bn from pri-
vatisation.
This compared with DM75bn
in the UK and DM20bn in
France, according to the Insti-
tute der Deutschen Wirtschaft
in Cologne.
US bond market rallies after
news of stable price inflation
By Anthony Harris in Washington
EXPECTATIONS of higher US
interest rates weakened yester-
day after the release of figures
showing unchanged consumer
price inflation and a 7 per cent
tall in durable goods orders,
r a th e r sh a rper th «" expected.
As a result; toe bead market
rallied by mt to half a point
and the -dollar weakened
slightly on further concerted
intervention by the central
US Coru nmer PH
Month on month change
09%,
Consumer prices rose by 0.4
cent- in July, precisely in
with market expectations,
according to the Bureau of
Labour Statistics. However,
there was a slight reduction in
the rate of inflation apart from
the volatile food and energy
sectors.
This was mainly the result of
renewed weakness in the doto-
ing market, where prices have
now feBen byrl per cent in toe
pas t th ree month s, afte r an
attempt to recover profit mar-
with sharp increases in
09%
04%
0l2%
Consumer demand for all eggs.
CONTENTS
non-durables has been weak
for several months.
As a. result of the drought,
food prices rase by nearly a
full percentage point. The
sharpest increases were in
fruit and vegetables, cereals
and bakery products and in
The Call in durable goods
orders was caused mainly by
the return of defence orders to
a more normal level after tix>
release of a heavy backlog of
orders in June. The monthly
total fell by 44 per cent to
37.8bn.
Most of the rest of the foil
was in civilian transport equip-
ment, with car orders down
from recent high levels and a
drop in toe rate of aircraft
ordering, which is always
erratic. The aircraft market,
according to the Department of
Commerce, remains strong.
The underlying strength of
manufacturing demand was
confirmed with a further L5:
per cent rise in unfilled orders
for civilian goods and the sus-
tained high level of orders for
non-defence capital equipment,
which at 335.4bn stands 109
per cent higher than in July
1987.
However, the markets had
feared some further signs of
overheated 'demand for manu-
factures.
A decision by Kalian
President Cosslga not
to taka a holiday in the
troubled region of Alto
Adige is seen as
acknowledgement that
security cannot be
guaranteed, following
16 bombings in bitter
nationalist conflict
Page 2
US pottloet Conservatism rules In Quayie's
Indiana homeland — —
Ifnirtli Korea* Seoul looks for fair play from
builds a
__10
the European Community
Oanwaw bankings Dresdner
reputation on toe quiet
Bank
The curse of specialisa-
tion: Iran and Iraq prepare to talk — .12
Wnplnserlnni The relentless drive for size via
the merger . — 12
TMnf World rtahti Finding a more ambitious
way to escape the debt impasse 13
Lean Markets; Hong Kong; Taylor Woodrow:
Oil; Pleasurama — — 14
A ' * ‘ ■ ^ ^
AqrfcitUuro _
Arw-R*«i«w» -
World Quids
QDomiedttiss
TJ
11
Rmncisi FUtu/S*
Sold —
Intnsfl onsl bone* — ~
ms. Caprtal Msrkocs —
EdtofisJ C o n w B sm .
EUKXXKfce* _
23 RswMatsrisls
32
It
14
13
14
10
-W4fl Street
-London
12 Mon ey Msrtcsts .
Technology .
unit Trusts .
Weather
12 World Index.
09
33-36
27-31
- 19
24-27
_ 14
YOUR POINT OF VIEW IS THE ONLY WAY
FOR US TO SEE THINGS.
Every industry has its own particular way of
looking at its market. It has to know the needs
and problems to compete successfully with
rivals. We appreciate this and as an important
issuing bank we have made it our business to
understand yours-Because the betterwe know
your perspective tbe better our chances of
helping you with vital finanrial advice and
loans necessary for growth. Norddeutsche
Landes bank is one of tbe 10 largest banks in
West Germany and one of the top hundred in
tbe world. It is a public law credit institution
owned by the Federal State of Lower Saxony
and the Lower Saxonian Savings Banks. These
owners guarantee all liabilities of the bank on a
joint and several basis. Norddeutsche Land e s-
bank is a world-wide bank participating fully
in all sectors of the domestic and international
banking field. Our total group assets in 1987
came, to 10L5'billion DM. With our branch in
London and tbe subsidiary in Luxembourg we
have two operating bases that enable us to
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NQRDDEUZSCHE LANDESBANK
GIROZENTRALE
Italian region outraged
by Cossiga decision
By John Wytes in Rome
FRANCESCO COSSIGA. the
Italian head of state, is this
week weathering the most seri-
ous controversy of the three
years since he was elected
President. This follows his
decision to cancel a private
holiday in the trouble-torn Alto
Adige.
The President appears to
have seriously miscalculated
the local and national impact
of a decision prompted by a
desire to avoid being the trig-
ger for “irresponsible acts
which could cause damage to
people and property.**
Extreme nationalists, possi-
bly from both the German- and
Italian-speaking communities,
have exploded no fewer than 16
bombs over the last three
months in a fresh outbreak of
terrorist incidents which have
punctuated the past 30 years.
While Mr Cossiga’s cancella-
tion was not motivated by any
fear for his personal safety, his
non-appearance in the Alpine
town of Merano is being seen
as a reluctant acknowledge-
ment that the Italian authori-
ties can no longer guarantee
law and order in the region.
The 124.000-strong Italian
minority, whose disquiet about
political and linguistic conces-
sions made to the 280,000 Ger-
man-speakers has expressed
itself in votes for the Italian
Fascist Party, is masking a
sense of near-betrayal behind
polite expressions of puzzle-
ment and disappointment
Mr Ciriaco De Mita, the
Prime Minister, has felt bound
to issue a carefully-worded
statement which does not call
into question the President's
decision but which stresses
that "the forces of law and
order are perfectly able to con-
front and to deal with" isolated
episodes of destruction.
The most recent of these last
week saw the bombing of a
huge water pipe which could
almost have had the effect of a
darn burst over a small village
in the valley below, but for the
functioning of a cut-off valve.
Large sections of the press
have reluctantly concluded
that the much respected Preair
Finns agree moves
to slow economy
THE FINNISH Government
and the main labour and
employers’ organisations yes-
terday agreed a wide range of
measures to stabilise the rap-
idly overheating economy. The
package, which includes mod-
erate wage increases, tax bene-
fits and an index clause for
inflation, would increase net
incomes by 2.5 per cent next
year. The measures are
designed to put a clamp on Fin-
land’s rapidly rising inflation,
which the Finance Ministry
expects to jump from a 3.7 per
cent annual rate last year to
&5 per cent by the end of this
year. The target for 1989, pro-
vided that all the parties stand
by the agreement, is to keep
inflat ion below 4 per cent.
Under yesterday’s pact, unions
and employers agreed to a
nominal wage increase of 40
pennies an hour or FM68 a
month .
The Government, mean-
while, has decided to cut taxes
by FM3.9bn <£5I4m>. This
includes a 5.5 per cent adjust-
ment in Income tax tables and
a further FML4bn in other tax
cuts. The agreement also car-
ries an index linkage clause of
12 per cent for inflation in Sep-
tember-December 1988 and 4
per cent for December 1988 -
December 1989.
The compromise was made
difficult by the negotiations on
next year’s budget, which is
expected to grow by 9 per cent
to FM124bn. The budget will
include a partial reform of Fin-
land’s tax structure aiming to
cut income and corporate taxes
on one hand and broaden the
tax base on the other. Labour
unions have strongly opposed
a number of cuts in tax bene-
fits. For example, they won the
battle over tax-free onion
membership fees and tax-free
strike benefits yesterday.
The agreement, which runs
until February, carries a
“strong recommendation” but
is not binding. Individual
unions may still bargain for
higher wage increases and
other benefits.
De Cuellar may support
Bonn’s UN forces role
By David Goodharf in Bonn
MR Javier Perez de Cuellar,
UN Secretary-General, has
intervened in the debate over
whether the West German
army, the Bundeswehr, should
participate in UN forces by
expressing indirect support for
such a move.
In an interview published
today in Die Welt, the UN
Secretary-General says he
would welcome contributions
to peace-keeping forces, includ-
ing troop contingents, from all
members of the organisation.
The German constitution is
ambiguous on tbe issue of
whether the Bundeswehr can
be deployed outside the Nato
area. But the official position
of the current Government,
strongly backed by Mr Hans-
Dietrich Genscber, the Foreign
Minister, is that such deploy-
ment remains out of the ques-
tion.
This debate, Hke tbe related
argument over selling arms
.outside the Nato area, crops up
regularly in West Germany. It
has been highlighted in the
past few days by divisions cm
the issue within the opposition
Social Democratic Party.
Also, Mr Franz Joseph
Strauss, Prime Minister of Bav-
aria, recently accused the Gov-
. eminent of cowardice in refus-
ing to send the German Navy
to the Gulf. He said that, 43
years after the Second World
War, West Germany should
behave like a normal member
of the family of nations and
must be in a position to fulfil
international tasks.
UK-Norway row over oil
supply vessels may end
By Karen Fossil in Oslo
MR Peter Morrison, the UK
Minister or State for Energy,
yesterday announced plans to
end by March 31, 1989 the
long-standing trade dispute
between Norway and the UK
which excluded Norwegian
supply vessels from operating
on the UK continental shelf.
A special initiative enacted
by the UK Government in 1986
to support European Commu-
nity supply vessel fleets pro-
hibited Norwegian kept from
the UK Shelf because of Nor-
way's non-EC status.
the UK goes back to the 1980s
when more technologically
advanced Norwegian vessels
were used by UK offshore oil
and gas field operators.
Because of the wide-range of
tasks which Norwegian vessels
could perform, the more dated
UK fleet soon became excluded
from its own domain.
However, the supply vessels'
dispute between Norway and
UK operators had also com-
plained that Norwegian regula-
tions excluded them from oper-
ating on the Norwegian
continental sfonif . Norway sub-
sequently amended its rules to
allow UK vessels e ntry .
dent has committed an error of
judgment. "The good faith of
his intentions is obviously
beyond question but a mistake
has been made," said La
Rppubblica yesterday. “The
first controversial mistake of
his presidency," commented La
Stampa.
Tension in the region has
apparently been rising since
agreement in March between
the Government and the Sud-
Tiraler Volkspartd, represent-
ing the German-speaking
majority, over a package of
measures guaranteeing the
equal use of German a fur-
ther strengthening of local
political autonomy.
These were designed to com-
plete a process guaranteed by
the Treaty of Paris between the
victorious wartime allies in
3046
The South Tyrol was part of
the Austrian empire until the
end of the First World War
until it was transferred to Italy
as a reward for entering tbe
war on the ultimately victori-
ous side in 3915.
Greens set
poll agenda
in Sweden
By Sara Webb
in Stockholm
WITH THE e m erg e nce of the
envi ronmen t as one of the Mg
issues in the Swedish general
election, politicians of all hues
took the opportunity to con-
vince voters of their deep com-
mitment to curbing pollution,
in a televised debate last night.
For the first time, the Green
Party joined representatives of
tbe other main parties, includ-
ing the Energy and Environ-
ment Minister, Mrs Birgitta
Dahl, for a political debate on
traffic pollution and energy
policy in view of the pro-
gramme to phase out nuclear
energy.
During the last election cam-
paign in 1985, the Greens were
excluded from important tele-
vised discussions, but their
increase in popularity (during
the past year, opinion polls
have regularly shown them
topping the 4 per cent thresh-
old required to enter Parlia-
ment) has ensured them a
place in the political arena.
Their rise has forced other
parties to work hard to appear
committed to environmental
protection.
The ruling Social Democrat
Party has worked hard on
shedding its image as the “con-
crete party" committed to
industrial development and
has proposed tighter controls
on the emission of air and
water pollutants, as well as
bringing forward the closure
programme for Sweden’s
nuclear reactors.
Both the Social Democrats
and the main oppostion parties
fear that if the Greens enter
Parliament they will change
the traditional pattern erf Swed-
ish politics, by holding tbe bal-
ance of power between the
Socialist and non-Sodalist
blocs.
• The Governor of Sweden's
central bank, Mr Bengt Dennis,
■said yesterday that be would
join Mr Kjell-Olof Feidt, the
Finance Minister, in co-chair-
ing the International Monetary
Fund/World Bank annual
meeting in West Berlin
between September 27-29.
The decision was taken
because of growing uncertainty
over tbe outcome of the Swed-
ish general election, to be held
on September 18 only a few
days before the annual meet-
ings start.
The Rikshahk (central bank)
said that if the ruling Social
Democrat party were to lose
the election, Mr Dennis would
take over as chairman of the
meetings in place erf Mr Feidt.
Sweden took on the chair-
manship of the boards of gov-
ernors of the IMF and World
Bank last year.
“We asked tbe Funds If Mr
Dennis could co-chair the meet-
ings and they agreed yester-
day,” said a senior official at
the Riksbank, who added that
the decision was taken to
“avoid any awkwardness” in
case the Social Democrats lost
the election.
FINANCIAL TIMES WEDNESDAY AUGUST
24im
EUROPEAN NEWS
Hint of economic reform
for Soviet republics
By John Lloyd in Moscow
Cossiga: holiday change.
Italy sees
payments
surplus soar
By John Wyles
NEWS THAT Italy’s balance of
payments reached a record
monthly surplus in July was
slightly tarnished yesterday by
evidence that inflation may
have risen from around AJ9 per
cent to an annual rate of above
5 per cent
The monthly survey of con-
sumer prices in major cities
revealed the impact of the Gov-
ernment’s raising of the cen-
tral VAT rate in July from 18
to 19 per cent together with an
increase in electricity charges.
Increases in the local price
indices ranged from annual
rates of 4JB per cent in Genoa
to 52 per cent in Palermo.
Meanwhile, the L3,581bn
(£L5bn) surplus on the balance
of payments in July reflected
strong inward capital move-
ments, some undoubtedly
attracted by comparatively
high Italian interest rates, and
others in the form of a $lba
loan raised by the Treasury.
Non-bank capital flows regis-
tered a IAOOOim surplus, while
Italian portfolio investments
abroad reached L946bn. Official
reserves at the end of the
month stood at L78478bn.
This year has already seen a
record monthly deficit in April
when tbe current account was
L3,042bn in the zed. Neverthe-
less, the startlingly good July
figure leaves the balance of
payments with an L896bn sur-
plus after seven months com-
pared with a deficit of Ll,691bn
in the same period last year.
• Soviet officials will arrive
in Italy today to inspect the
nuclear missile site at Comiso
in Sicily, the Foreign Ministry
said yesterday, Reuter repeats
from Rome.
Comiso, where 112 US cruise
missiles are based, will be the
last of Nato’s European bases
to be inspected under the US-
Soviet Intermediate Nuclear
Forces treaty.
The treaty, signed in Decem-
ber, provides for the scrapping
of medium-range nuclear mis-
siles and verification by inspec-
tors from each side.
MR VITALY VOROTNIKOV, a
member of the Soviet polilburo
and Prime Mtrrfg**r of the Rus-
sian Federation, has foreshad-
owed “a completely new level
of responsibility” for the gov-
ernments of the Soviet repub-
lics when the political reforms
are carried through next year.
His remarks, carried in the
newspapers yesterday, came on
the eve of mass demonstra-
tions planned for last night in
the capitals of the Baltic repub-
lics - Tallinn (Estonia). Riga
(Latvia) and Vilnius (Lithu-
ania).
The demonstrations were
organised to mark the 49th
anniversary of the s i gning of
the Nazi-Soviet pact in 1939
— which ultimately meant the
incorporation of the republics
into the Soviet Union.
Early reports by Renters
from Tallinn describe a rally of
some 2^00 in the city's Hirve
Park, carrying black, white
and blue Estonian flags and
placards with both the Nazi
swastika awd the Soviet ham-
mer end sickle crossed out. Mr
Lagle Parek, a local activist,
told the crowd: “It is not
enough to recognise the Soviet
occupation of 1940; we have to
restore our independence.”
Mr Vorotnikov’s remarks,
coupled with a growing debate
in tbe press over in c reasing
regional economic indepen-
dence, point to a Government
drive to decentralise power to
republican and lower levels.
While this is presented as
being in line with the philoso-
phy of perestroika, or eco-
nomic restructuring; it is
dearly also designed to chan-
*nel gro wi n g nationalist feeling
into an acceptable direction.
Mr Vorotnikov said that Tor
the first time for many years
we are setting up the economic
basis for local and regional
self-government*
In an article In yesterday's
edition of the newspaper
Sovietskaya Kultura two Esto-
nian economists. Mr E. Savi-
saar and Mr L Haig, called for
“foil self-financing at republi-
can level” so that Eston-
ia - which is already consider-
ably more efficient than moat
other Soviet republics - could
specialise in the production of
export goods and the acquisi-
tion of hard currency.
They said that the control of
most enterprises by Moscow-
based ministries had meant a
distortion of tbe Estonian econ-
omy over which local bodies
had no control, and now acted -
as a brake upon rapid scientific
nmf technical development. -
They sharply criticise senior
managers and officials who
opposed the required changes,
saying that it is because they
would Rise their jobs.
“Therefore, it is not suxprix-
ing that the idea of self-financ-
ing would be rejected by these
high-paid cferirw for whom the
armchair in which they sit Is
regarded as equivalent to effir
Malta’s opposition takes a
long hard look at its image
Godfrey Grima examines a dramatic policy change
M ALTA’S opposition
Labour Party has
emerged from its
annual delegates congress bris-
tling with reforming zeaL Still
smarting from its downfall at
the May 1987 general elec-
tioruafter running the country
for an uninterrupted 16 yean,
the party has taken a long,
hard look at itself
Taking their cues from party
leader Dr Carmelo Mifsud Bon-
nici - now confirmed in his
post by an overwhelming
secret ballot - delegates boldly
lanced abscesses long diag-
nosed, to have brought the
party into disrepute with vot-
ers.
Wayward members, party
nffir-faig and former ministers ‘
— whose claimed misbehaviour
is said to have given rise to
widespread corruption - were
sharply criticised and may yet
be made to account for their
mischief.
Concern was also shown
with the party's indifference
towards the unc he c ke d spread
of political violence.
The high-handed tactics
reserved by the police for dis-
senters, the consistent ransack-
ing of opposition party clubs
and the attack on the residence
of Dr Eddie Fenech. Adami,
now the island's Prime Minis-
ter, were all viewed as very
serious mistakes which cost
the party large numbers of
votes.
Long after the horses have
bolted. Labour Party delegates
seem to realise what consider-
able mileage Fenech Adami’s
ruling Christian Democrats
drew from Labour's erring
way&
It was this, many delegates
were convinced, which gave
the Christian Democrats their
surplus 4,700 votes and their
single-seat parliamentary
majority.
Hardly anyone questioned
the Labour party’s policies and
certainly not the political, eco-
nomic and sodal frameworks
- enacted despite widespread
complaints by the island's
Roman Catholic CSrarch, lead-
Roman Catholic Church, lead-
ing businessmen and other
prominent sectors of the com-
munity as one radical reform
. followed another. .
With the new gov ernment of
Fenech Adami taking longer
than expected to spur the
island's slnggish economy or to
narrow deep-seated political
divisions, the Labour Party is
convinced its was its tarnished
popular image, not its uncon-
ventional tacks, which led the
party akmg the rood to trouble.
The point is not lost on. Dr
Mifsud Bonnici, who says
much has been learnt from
past mistakes.
In the 16 infi^ithu fog party
has been in opposition, he has
taken the time to reshuffle the
cards in the Labour Party pads
and young professionals, all
kindred spirits, have been
voted into a good number of
ton partv posts.
Also, statutory measures
have been taken to clip the
wings of undisciplined mem-
bers, and former min-
to the party for his behaviour,"
Dr Mifsud Bonnici add s.
Whether these measures alone
will help the party’s image
The confrontational, divisive
and autocratic governing style
of former premier Mr Dorn
Mintoff, the distrust of the
judiciary, together with a
series of proven constitutional
breaches, all counted against
the party an election day.
In this way, the Labour Gov-
ernment's successful creation
of new wealth and the provi-
sion of social benefits were
pWkmirfpH
Dr Mifsud Bonnici hopes
that by bringing forward a
more respectable class of
labour politician and mantaln-
ing a tight grip on patty disci-
pline, his party will be looked
upon more favourably when
the island votes again in 3992.
Anyone occupying party
posts will now have to be con-
firmed by delegates every two
years, including’ ministers
Cypriot leaders seek good atmosphere
By Andrew Gowers in Geneva
THE Greek and Turkish
Cypriot leaders sought yester-
I day to create a good atmos-
phere for today’s resumption of
Cyprus peace talks by paying
each other compliments and
stressing their desire to see the
negotiations succeed.
Mr George Vassiliou, the
Cyprus President, and Mr Rauf
Denktash, leader of the break-
away state established in Turk-
ish northern Cyprus in 1983,
met separately in Geneva with
Mr Javier Perez de Cuellar, the
UN Secretary-General, who is
to host a working lunch for
them today.
This will be their first meet-
ing, and will mark the formal
relaunch of UN-led efforts to
resolve the conflict over the
island after a three-year break.
Further encounters between
the two men are also expected
this week ahead of the
full-scale negotiations which
are due to start in Nicosia in
September.
In their remarks to reporters
yesterday, both Mr Vassiliou
and Mr Denktash were anxious
to give the impression that
they aim to stmt their tafog
with a clean slate.
Today’s statement will steer
clear of potentially trouble-
some details, making only an
obligatory reference to the
high-level agreements of 1977
and 1979 which set the frame-
work for a bizonal federal
republic.
The. meetings between the
two leaders are designed essen-
tially to create a personal rap-
port for negotiations in which
ffiey are expected to be directly
involved throughout.
To this end, Mr Vassiliou
paid Mr Denktash a series of
compliments in a rare inter-
view with Turkish television,-
and Mr Denktash contrasted
Mr Vassiliou with bis predeces-
'sor. Mr Spyros Kyprianou, who
was ousted as Cyprus presi-
dent in last February’s elec-
tions, and. with whom Mr
Denktash did not get on.
“We’re deal in g with a whole
new equation,” said Mr Denk-
tash. “Kyp anou was a brick .
wall, arid I understand that
VassHkm is not a walL”
However, the differences
Commission proposals on company tax would change depreciation rules
Bu UlafcuM ^ . .
By Richard Waters
THE TAX bills of all
companies operating in the
European Community will be
altered significantly if draft
proposals for a directive pro-
duced by tbe European Com-
mission are adopted..
The proposals, which outline
how a company's profits
should be calculated for tax
purposes, would standardise
the markedly different systems
in operation across Europe.
In an introduction to its pro-
posals, the Commission says
the changes are part of a plan
to remove the distortions to
investment decisions and com-
petition between companies
created by different tax
regimes.
Harmonising the tax base in
different states is only one step
towards these objectives,
though. The second stage will
be the for more rfiffimit task of
reducing the differences
between corporation tax rates.
A similar attempt to bring
value added tax rates into line
bas already caused political
upheaval in the Community.
The most far reaching of the
corporation tax proposals con-
cerns the way in winch compa-
nies set depreciation against
their profits, in line with
accounting rules in the fourth
company law directive, assets
which decline in value would
have to be written down over
their useful lives. The dapreda-
tion each year would then be
set against taxable profits.
Companies would be forced
to apply the same depreciation
rates for tax purposes that
they use in their published
accounts, ending a division
which exists in several mem-
ber states, including Britain,
the Netherlands and Ireland.
These rules would outlaw
the use of accelerated depreda-
tion rates to provide a tax
incentive to new investment.
Such inducements were phased
out in [the UK after 1984 but are
still in use elsewhere, most
notably in Ireland.
A further important innova-
tion for several countries
would be the ability to write
down goodwill for tax pur- 1
poses. This is currently permit-
ted to varying degrees in West
Germany, France and Belgium.
The ability to niwim tax relief
on goodwill would have a sig-
nificant affect on acquisitive
companies in service industries
which pay substantial premi-
ums to acquire brand names-
and other intangible assets.
The UK drinks and hotels
group Grand Metropolitan, for
instance, has recently
•announced its intention to
show £500m of acquired brands
in its bal au*** sheet. Under
Commission’s proposals, it
would be able to unite these off
against tax over five years - a
reduction in its taxable profits
of £l0Qm a year.
Such a radical development
is likely to provide consider-
able impetus to the movement
to allow companies to show
int ang ibl e assets In their bal-
ance sheets. They would be
forced, though, to write these
off against reported profits - a
move winch accountants claim
would distort the companies’
true profits.
Technical changes in the
method of calculating deprecia-
tion would also have a marke d
affect on some companies.
depending on their current
national rules. For instance,
the Introduction of a choice of
depreciation methods will ben-
efit French companies, since
they will effectively be able to
write down buildings faster
than under current rules.
Other significant themes
tackled include how companies
should calculate capital gains
or losses; how they value
stock; and the extent to which
expenses and provisions can be
set against tax.
The Commission's proposals
are Hkely to take several years
to implement. Earlier draft
directives for harmonising cor-
poration tax have been pend-
ing for more thaw 10 years.
According to Mr John Gold-
sworth, a tax consultant with
Coopers & Lybrand in London,
the requirement for unanimity
among member states over tax
proposals, compared with the
simple majority needed iq
other areas, means that the lat-
est proposals are unlikely to
see tbe light of day for some
while — by which time market
forces may already have forced
roe various national corpora-
tion tax systems and rates
more into line.
The document has not yet
been published, but has had a
limited circulation among
interested parties.
Hint of new
economic -
freedom for
ctency," they write. _ I
However. Dr B. Shtulberg. j
another economist writing m
the same newspaper, points
out that tell rational auton-
omy will contradict, at least in
some respects^ the drive to
locate tbeseat of as many pro-
duction decisions as possible in
the enterprise,- replacing the
“dictatorship of the ministries i
with the dictatorship of the i
republics."
He says that a full Mown
model of economic Indepen-
dence would cause uneven
development among republics,
as some - presumably like
Estonia - would surge ahead
in living standards, white oth-
ers fell further behind.
Mr Raig and Mr Savisaar
also admit that this would hap- 1
pen, although for them It posed ;
no problems. i
Soviet
republics
By John Lloyd In MoecOw
MR VITALY VOROTNKOV’-*
Russian Federation. h» fort-
• THE SOVIET authorities;
have Jafted the otgaulsers of
last Sunday’s public protest in
Moscow to tnntk the 20th anni-
versary of tiut crushing of tbe
Prague Spring, writes John
Lloyd. They have been jailed
for up to 15 days white fines of
UP to 100 roubles (*158) have
been imposed on a farther 15
activists belonging to the Dem-
ocratic Union group.
Official spokesmen have
made no comment on allega-
tions earlier this week that
those arrested were beaten in
the police stations.
between them on issues of sub-
stance appeared to remain as
'great as ever. Mr Vassiliou
emphasised the paramount
need for agreement on the
withdrawal of Turkish troops
from Cyprus, as demanded by
the UN, and for guarantees of
freedom of movement through-
out the ialgu d
Mr Denktash replied that
there was no question of a
withdrawal of Turkish troops
before the internationally-re-
cognised Cyprus Government
was dissolved.
Today's statement will set a
deadline of June 1989 for con-
elusion of the negotiations, a
date endorsed with differing
degrees of enthusiasm by the
two leaders.
level of responsibility* forth®
governments of thejww*
republics when ths pctfjkg
reforms are carried through
a ^s y rSaaxk^canted to 1
newspapers yeeteijay^cjme
on the eve of mass demwgre*
tions planned for last night to
the capitals of the Boltin
Tepohlies - Minn (Estonia).
JEUgo (Latvia) and Vilnius
( Lith uania).
The demonstrations were
organised to mark the 4«h
anniversary of the slgnfog of
the Nazi-Soviet pact In IMS » -
which ultimately meant the
incorporation of the repohuc*
bits the Soviet Union.
Early reports by Reuters
from Tallinn describe a x*Uy
of some 2.000 in the dty *
Hirve Park, carrying black,
white and blue Estonian flag*
and placards with both the
Nazi swastika and the Soviet
hammer and sickle crossed
out Mr Lagle Panfk, a foral
activist, told the crowd that “It
is not enough to recognise (he
Soviet occupation of lMfcw*
have to restore our Indepen-
dence.” __
Mr Vorotnikov's remarks,
coopted with a growing debate
In the press over Increasing
regional economic Indepon*
deuce, point to a government
drive to decentralise power to
mmhUcan and lower levels.
whenever the party is in gov-
ernment
In addition, a committee of
vigilantes has been set up to
discipline anyone stepping out
erf line.
The idea Is to ensure that
misbehaviour by Ugh ranking
party officials, which created
the impression Labour was
ruining a disorderly house
while in gov ernmen t, will be
promptly and harshly dealt
with.
Punishment, explains Dr
Mifsud Bonnici may include
the party withdrawing Its
ticket from sitting MPs or
throwing not those whose
transgressions, show the party,
in a bad light
“No-one wants to start any
witch hunts, but in future
ev e ryone win have to account .
republican and lower levels.
While this is presented as
luting in line with the philoso-
phy of perestroika, or eco-
nomic restructuring, it
isdearly also designed to
channel growing nationalist
feeling into an acceptable
direction.
Mr Vorotnikov said that Tor
the first time for many years
we are setting op the economic
basis for local and regional
self-government.”
In an article in yesterday's
edition of the newspaper
Sovietskaya Kultura two Esto-
nian economists, Mr B. Savi-
saar and Mr L Raig. called for
“fall self-financing at republi-
can level** so that Estonia -
which is already considerably
more efficient than most other
Soviet republics — -could speci-
alise In the production of
export goods and the acqntek
firm of hard currency.
They said that the control of
most enterprises by Moscow-
based ministries had meant a
distortion of the Estonian
economy over which local bod-
ies had no control, and now
acted as a brake upon rapid
scientific and technical devel-
opment.
They shandy criticise senior
managers and officials who
opposed the required changes,
saying that it is because they
would lose their Jobs.
“Therefore, it Is not surpris-
ing that the idea of self-financ-
ing would be rejected by these
high-paid clerks for whom the
armchair in which they sit is
regarded as equivalent to effi-
dency," they write.
However, Dr B. Shtulberg,
another economist writing in
the same newspaper, points
out that full regional auton-
omy will contradict, at least in
some respects, the drive to
locate the seat of as many pro-
duction decisions as possible
in the enterprise, replacing the
“dictatorship of the ministries
with the dictatorship of the
republics.”
He says that a full blown
model of economic indepen-
dence would cause uneven
development among republics,
as some — presumably like
Estonia — would surge ahead
in living standards, white oth-
ers fell further behind.
Mr Raig and Mr Savisaar
also admit that this would
happen, though for them it
posed no problems.
• THE SOVIET authorities
have jailed the organisers of
last Sunday’s public protest In
Moscow to mark the 20th anni-
versary of the crushing of the
nno Spring, writes John
Lloyd. They have been jailed
for up to is days while fines of
up to Roubles 100 (£93) have
been ImpOMd on a farther IS
activists to the Dem-
ocratic Union group.
Official spokesmen have
mo d e no comment on allega-
tions earlier this week that
those arrested were beaten in
the police stations.
financial Times
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(Europe) U4,, Frankfort Branch, repro-
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G.TA Owner. M.C. Qonnn, D.E.P.
Palmer, London. Printer: Frankfurter
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JP* FINANCIAL
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FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
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Seoul to
cut trade
surplus by
buying gold
SOUTH KOREA plans to
increase gold imports year
to help curb its growing cur-
rent account surplus ease
trade frictions with its
trading partners, Economic
Planning Board officials said.
Reuter writes from Seoul.
"Imports of gold would help
account
to reduce our current
surplus and control the money
supply," one official said. He
said the volume of imports had
not been worked out.
S Korean car
exports down
South Korea’s three, main car
manufacturers reported they
exported 52,672 motor vehicles,
mostly passenger cars, in July,
a decrease of 4.4 per cent from
55,324 . vehicles . in the same
month last year, according to
AP-DJ in SeouL
The aggregate of exports
between January and July also
declined 5.7 per cent to 299,686
vehicles from - the year-ago
period’s 317,970 vehicles,
according to the reports.. The
setback was attributed to
strikes which battered the
South Korean car industry in
months up to June.
Japan’s economy
resumes growth
Japan’s economy is expanding
steadily alter a temporary halt
in April and May, a senior offi-
cial of the. Economic Planning
Agency said, Reuter reports
from Tokyo. The official,
explaining, the- agency’s
monthly economic report, said
the economy, showed almost nil
growth in April and May.
The economy's growth now
is supported hugely by strong
individual consumption,
increased capital spending and
improved corporate earnings,
the monthly repeat said.
Sudan' to censor
relief reports
Sudan has imposed censorship
on foreign journalists after
criticism abroad of government
handling of flood relief aid,
Reuter reports from Khar-
toum- Mr Abdullah
Mohammed Ahmed, the Infor-
mation Minister, announced on
Monday night that all reports,
photographs and video tapes
must be submitted to-Mtatetiy
of Information officials for
approval before, being des-
patched overseas.
Hotels were ordered not to
allow the scores of visiting for-
eign journalists to transmit
news items by telex unless the
stories were stamped approved
by the ministry of information.
Taiwan growth rate
Taiwan’s economy grew at a
rate of 6.7 per cent during the
second quarter of .1988 com-
pared with the same period a
year earlier according to the
Directorate General of Budget,
Accounting & Sta t istics. AP-DJ
reports from Taipei. The
agency said the nation's real
gross national product for the
second quarter was NTS752J6bn
(£15.SbnX an increase from NT*
705. 6bn a year earlier and from
NT$731bn during the first
quarter of 1968.
NZ to end subsidies
The New Zealand Government
is to phase out shipbuilding
industry subsidies and end
import licensing for commer-
cial vessels, Mr David Cayglll.
the Trade and Industry Minis-
ter said, AP-DJ writes from
Wellington.
BUDGET SURPLUS PUT AT RECORD AS5.47BN
Keating optimistic about
balance of payments
By Chris Sherweil In Sydney
THE Australian budget
delivered last night by Mr Paul
Keating, the Federal Treasurer,
was. his most optimistic yet,
reflecting official belief that
the country is close, to conquer-
ing its chronic bafainw* of pay-
ments and external debt prob-
lems.
“The nation is successfully
emerging from Its most severe
economic crisis in a genera-
tion,” he said in a televised
speech to parliament promis-
ing a record budget surplus of
A$5.47bn (£2.65bn).
But be added that the overall
strategy remained one of
restraint, and said pointedly
that the Government, "stm
wanted to eradicate inflation.
“Australia’s number one eco-
nomic disease”.
Mr Keating’s statement, his
tenth since the Labor Party
came to power in 1983, was in
line with market expectations
after being billed by the Gov-
ernment as its “best yet”.
But as the Treasurer himself
acknowledged. International
developments - strong world
economic growth' since last
October’s sharemarket crash
and a- surge in commodity
prices - “have been much kin-
der to ns recently”.
For the hard-pressed Austra-
lian income tax payer, who has
watched the Government’s cof-
fers swell through fiscal drag
while experiencing five years
of wage restraint, Mr Kea ting
promised tax cuts from July
next year.
That is well-timed for the
next election, due in 1990, hut
they will only be given as a
tradeoff with pay increases to
be negotiated with the union
movement For upper income
groups, they may also be
phased in, while low and mid-
dle income groups can expect
the cuts in one fell swoop.
The opposition Liberal Party
and business groups last night
criticised the budget for not
delivering tax cuts sooner, and
for continuing a slow adjust-
ment to continuing external
problems.
The budget's highlights
include:
• Continued restraint In fed-
eral government spending,
with a real 19 per cent cut to
A$82bn, coupled with buoyant
tax and .other revenues of
A*87.5bn, wOl give a record
A$x5bn budget surplus for the
year to June 1989, equivalent
to 1.7 per cent of gross domes-
tic product.
The figure compares with an
actual A$2.04bn revised sur-
plus In 1987-88,- a figure origi-
nally projected by Mr Keating
one year ago at a A*27m defi-
cit.
• A reduction in the net bar-
rowing requirement of federal
and state governments and
public enterprises to zero. This
will allow the net redemption
of A$3bn in domestic bonds
and net retirement of AS3bn in
foreign debt
• Another 9 per cent forecast
improvement in the terms of
trade, to give a prospective
current account deficit for
1988-89 Of AS9.5bn. At 3 per
cent of GDP, this would be half
the level of three years ago.
• A near-stabilisation of the
country's net external debt as
a proportion of GDP at the
high level of 309 per cent To
reduce the bur den, the govern-
ment acknowledges that a fur-
ther fall in the current account
deficit is needed.
• Real growth in GDP of 3.5
per cent, after 39 per cent in
1987-88, but with no contribu-
tion from net exports as
domestic demand continues at
a strong pace. This is expected
to bring a further decline in
the rate of unemployment to
an average 7.25 per cent from
7.8 per coat, and an increase of
2.75 per cent in employment.
• A projected 12 per cent
increase in business invest-
ment, while private sector con-
sumption holds steady at 2.75
per cent growth.
• A reduction in the Inflation
rate to 45 per cent by June
1989 from the present 7J. per
cent leveL This will be helped
Paul Keating making bis budget speech in Parliament yesterday
by a 0.5 point contribution
from newly-announced indirect
tax changes, including an
A$400m cut in beer tax, the
most welcomed revenue mea-
sure.
• Asset sales of A5700m,
lower than the 1987-88 proceeds
of A$1.06bn. The bulk will
come from the sale of surplus
defence land and buildings,
and from a skyscraper in Syd-
ney’s central business district.
• A series of social welfare
measures targeted at those
most in need, including an
increase in payments under a
new family income support
scheme and two progr a mmes
to help disadvantaged people
re-enter the workforce. The
Government also confirmed
new .tertiary education fees, to
be paid as a tax.
Mr Keating also announced
the removal of two rem aining
elements of unwarranted regu-
lation in banking: the abolition
of the distinction between trad-
ing and savings banks, and an
easing of the requirement that
banks place deposits with the
central bank.
The measures, he said,
would enhance the efficiency
of the banks and exert down-
ward pressure on interest
rates.
His speech was peppered
with back-slapping superla-
tives describing the Govern-
ment's achievements. He said
that Australia’s rate of job
growth was nnmafcheri in the
Western world, and that no
leading OECD country had
reduced the size of its govern-
ment sector, on such a vast
scale.
Inflation was “locked well
into single digits” for the first
time in 20 years, and under his
wages-tax plan could be
reduced to 3 or 4 per cent by
1990. This, he said, would “put
us back with the rest of the
world, an achievement which
has eluded us for a genera-
tion".
But a challenge remained.
“And that," he declared, “is to
prove that we can turn the
opportunities of better times
into solid foundations for long-
lasting prosperity. . .
“If we are to avoid the mis-
takes of the past, we must
abandon forever the myopic
view that the world owes us a
living and will go on bankroll-
ing us whatever we do."
Bank rules. Page 22
Iran claims Iraq is preparing to attack
By Andrew Gowers in Geneva
A - FURTHER ' cloud was
yesterday cast over tomor-
row’s Geneva talks between
Iran and Iraq when Mr All
Akbar Velayati, the Iranian
Surri gn lUnhtor , dirimri that
Baghdad was violating the
Gulf ceasefire by massing its
troops in preparation for a
fresh attack on Iranian forces
on the central war front.
The Islamic Republic News
Agency reported that Mr
Velayati had complained to Mr
Javier Perez de Cuellar, the
United Nations Secretary-
General, who will preside over
tomorrow’s meeting, that an
Iraqi armoured brigade had
advanced between 1 and 4 km
towards Iranian positions west
of tiie Do-Vfrai river, and that
Iraq’s 4th army corps com-
mander had threatened to
attack the Iranians unless
they withdrew to the east
hank of the river.
The Iraqis confirmed that
they bad threatened to use
force to push the Iranians
hade.
There was no immediate
em ifiim iti mi frnrn UN nffiriak
in Geneva that the complaint
had been received. But in
Baghdad, a spokesman with
the UN's military observer
group monitoring the ceasefire
seemed to rebut the Iranian
claim, saying the war front
was calm yesterday.
Iraq, for its part, accused
the Iranians of reinforcing
their positions across the front
from Its 4th army corps near
the southern town of Misan.
The Iraqi news agency said
Iraq told UN military observ-
ers: “If the Iranian troops are
not withdrawn to their origi-
nal positions, our forces will
push them back by force.”
Both sides have made a
number of charges of ceasefire
violations since the truce took
effect last Saturday, but none
of the allegations has been
verified, and "UN officials
believe the ceasefire is still
holding despite obvious brink-
manship by the two sides.
None the less, the persistent
recriminations can only com-
plicate the task of Mr Velayati
and Mr Tariq Aziz, the Iraqi
Foreign Minister, when they
tit down together for the first
time.
If their talks on a compre-
hensive settlement of the war
make heavy weather as expec-
ted, genuine breaches of the
ceasefire - If not a complete
breakdown — can be expected,
to result
Israel-PLO clash over farm marketing
By Andrew WhWey in Jerusalem
THIS TIME last year the Israeli
Government was busy encour-
aging middteclass Palestinians
living in. the West Bank and
Gaza Strip to set up economic
associations dedicated to pro-
moting local output
They were improving the
"quality of life" - a slogan bor-
rowed from Mr George Shultz,
the US Secretary of State - it
was said, and thus helping pre-'
serve social order. .
Twelve months later, the
Palestinian intifada has stood
that logic on its head. At a
stroke, Jordan’s precipitate
withdrawal from the occupied
■ territories has decapita te d the
Chambers of Commerce, mar-'
keting co-operatives and pro-
fessional associations in . the
West Bank which had always
looked to Amman for support.-
Headless, they have fallen
prey to a contest for control
starting between Israel and thef
FLO. Two planning meetings
of Palestinian businessmen
and formers arranged for late
last week in East Jerusalem
were broken up by police
before they could begin.
P romine nt Palestinian econ-
omists and development
experts were warned .by the
authorities not to get involved.
Their aim is the establishment
of new producers’ associati o ns
for dairy products and for fruit
The underground leadership oi
the uprising in tee Israeli-oc-
cupied territories has called on
Palestinians to create new
“popular committees” in every
town and village. This follows
Thursday’s banning of the
local associations by Mr Ylt-i
zhak Babin, the Defence Minis-
ter, and the subsequent arrest
of accused committee members
in the Gaza Strip. “All iff our
people are popular commit-
tees. They are our lungs and
we will never give them up,”
declared the uprising’s leaders
yesterday, through the latest
clandestine leaflet being dis-
tributed in East Jerusalem and
the West Bank-
Half a dozen refugee camps
in the West Bank and Gaza
Strip, as well as the important
city of Nablus, were undo: foil
curfew yesterday, following a
fresh wave of unrest on Mon-
day in which 17 people were
injured. One man was reported,
to have died in the Jabalaya
camp in Gaza, but there was
no confirmation of bis death
from the army.
and vegetables — the staple
agricultural export items from
the West Bank - independent
of the oM, pro-Jordanian bod-
ies.
Ideological blessing for this
move has been given by the
underground leadership of the
uprising; A clandestine leaflet
10 days ago specifically called
on Palestinian formers to mar-
ket their goods exclusively
with the Jericho-based Associa-
tion of Agricultural Marketing
Boards.
through the now banned “pop-
up in
ular committees" set up
each locality. A so-called
Supreme Marketing Council,
embracing formers and grow-
ers in bote the West Bank and
Gaza Strip, is being planned,
for instance, in competition
Headed by Mr Taksfan Fads,
the latter - Israel’s main nego- -
Hating partner among Palestin-
ian formers on such conten-
tious issues as exports to the
European Community - is
itself not even a year old.
Another embryonic- body, in
which tee Community-financed
Economic Development Group
run by Mr Ibrahim Malar is
involved, is attempting to
organise Palestinian meat and
milk producers.
The Civil Administration for
the occupied territories and the
Agriculture Ministry in Tel
Aviv are making quite clear
that they will have no truck
with three new bodies, even if
tee restrictions they impose
over the coming weeks create
additional, unwanted problems
with the European Commis-
sion.
At a meeting on Sunday, Mr
Shmuel Goren, the Civil
Administration’s head, and
Agriculture Minister Arie
NehamHn are reported to have
decided to penalise farmers
who refuse to market their pro-
duce through the old network.
“We will not allow hostile bod-
ies to export in place of the
normal channels,” confirmed
tee Civil Administration yes-
terday.
In practice, security officials
say this means that any former
or agricultural exporter
accused of association with the
“popular committees" will be
denied an export licence. Nor
■will the Agriculture Ministry
recognise certificates of origin
issued by bodies they believe
are PLO-oriented.
Compounding Palestinian
farmers’ headaches as they
attempt to harvest and market
their summer fruit are the
summary bans Imposed by tee
army on the sale of produce by
individual villages, in punish-
ment for protest disturbances.
Japan has modest hopes for Peking visit
A FIVE-DAY official visit by a
Japanese Prime Minister to
rihiwa should Tank among the
more important events on the
world diplomatic scene.
The two 'countries have
immense potential influence in
the world in general and espe-
cially in tfaexr region where
political currents are begin-
ning to fore again after several
years of stagnation. Their bilat-
eral relationship too is develop-
ing rapidly, as China becomes
more open and the Japanese
become more eager to mend
the wounds of the past and
Ian Rodger considers
the issues likely to be
covered in Takeshita’s
talks in China
help thetr neighbours.
However, tin
lb visit of Mr
Noboru Takeshita, the
nese Prime Minister to P
which begins tomorrow,
unlikely to produce any star-
tling results or initiatives. He
will confirm his country’s com-
mitment to helping China’s
ambitious modernisation pro-
gramme, offering * YSOObn
(£9L6bn) In loans in the 1990-95
period. Japan, provides about
70 per cent of all China’s bilal-
SHANG R i - LA I NT E RN ATI ON A IT
IN SINGAPORE
WHERE ELSE BUT THE SHANGRI-LA
; One of die .■wodd’S best hotels.
gSbongritobotel ^
SHAM 0 U 4 A
• GOlUNrffMKM
eral fitumria 1 ! fa a si writer
vein, the two countries will
sign an agreement providing
Japanese industrial investors
in China with tea normal legal
protections.
The Japanese Prime Minis-
ter, widely criticised for doing
virtually nothing on bis official
visit to Britain last spring, will
then embark on an ambitious
two-day. trip across China,
spending one day. visiting the
femous Buddhist caves at Dun
Huang mi the Silk Road and
then flying to *ha anra*>n> capi-
tal city Of Tf«n
The visit is ostensibly an
occasion to celebrate the tenth
anniversary, of the treaty of
peace and: friendship signed
between the two in 1978, and
the Japanese are relieved that,
for owe; bilateral relations are
relatively frefcjof tension.
Stno-Japaneae relations have
been troubled ever since the
two agreed' to- recognise each •
other to 1972. The problems are
in three. areas -.attitudes to
the Second World War, refer
tionswite Taiwan and trade.
" The trade fssue blew up to
1985 when- the •' Japanese
exploited to the foil -China’s
market opening and scored a
trade surplus of more than
83m. The Ojinewiwponded
by- slapping heavy tariffs on
Japanese goods and demanding
reciprocity. The Japanese
retreated* and- In recent .
months. China, now Japan’s
fifth largest trading partner
(Japan is China’s second larg-
est partner after Hong Kong}
have been enjoying small sur-
pluses with its eastern neigh-
bour.
P ricing hag long scrutinised
Japan’s relations with Taiwan.
In tee past couple of years,
the main sore point has been a
dormitory for Chinese students
in Kyoto bought by the Taiwan
Government in 1952. Peking
claims that it should belong to
China, and has not accepted
Japanese court decisions
* g»hi«efc its eteim Japanese offi-
cials say tea* China hag not
raised the issue for some time,
so they expect it may come up
only briefly during the visit.
As for China's frequent com-
plaints about Japan's insensi-
tivity to its neighbours’ feel-
ings about the Second World
War, Mr Takeshita will repeat
a commitment that bis country
will never again become a mili-
tary power. He may also point
' did not
out that he himself
visit the Tokyo’s Yasnkuni
shrine this year, a memorial
where many war criminals are
buried. China was angry when
former Prime Minister Yasu-
hiro Nakasone visited the
shrine two yeare ago.
The visit will begin with a
day a half Of rfjsflnfigirvng
between leaders of the two
countries in Peking at which
tee Japanese hope to concen-
trate on international and
regional issues. “We do not
know what China will raise on
tee bilateral side, but relations
have been in good shape in tee
past six months, so we do not
expect anything serious,” an
nffiriat said this week.
Japan’s main interest is
advancing the peace process is
Kampuchea. The Japanese are
working hard on the issue, see-
ing it as a test case erf their
diplomatic influence in South
East Asia. However, foreign
ministry officials said Mr Tak-
eshita would not criticise the
Chinese for their support of the
Khmer Rouge.
The Japanese will also
explore China's views and
interests in developments in
the Korean peninsula. With the
.democratisation of South
Korea and tee approach of the
Olympic Games, talk of more
fundamental diang w; in rela-
tionships in the area are in tee
air.
The Japanese would like
China to recognise South
Korea, and the Chinese would
like Japan to recognise Norte
Korea. In the past few weeks,
the Japanese have indicated
that they would respond flexi-
bly to North Korean overtures
to reestablish contacts broken
following the downing of a
South Korean airliner last
year.
Angola timetable gap
set to dominate talks
By Michael Holman, Africa Editor
THE spectacle of Gen Jannie
Geldenhuvs. South Africa’s
army nhfef in cordial and ani-
mated conversation with
Cuban officials around a res-
taurant table in Geneva earlier
this month, convinced even the
most sceptical observers that
the talks on south-western
Africa were making progress.
The unusual display of
camaraderie in fact presaged
the outcome of the Geneva
talks. They produced an agree-
ment among Angola, Cuba and
South Africa on a ceasefire in
Angola, and a September 1 tar-
get for the withdrawal of South
African forces.
But when tee talks resume
In the Congolese capital of
Brazzaville today, the amicable
relationship between Gen Gel-
denhuys and his Cuban coun-
terparts will be severely tested.
Delegates from Angola,
Cuba, and South Africa, under
the chairmanship of Dr Ches-
ter Crocker, the US Assistant
Secretary of State for Africa,
are expected to confront tee
single most important obstacle
to a regional pact: the wide gap
between the governments in
Luanda and Pretoria over the
timetable for the withdrawal of
some 45,000 Cuban troops in
Angola.
South Africa, backed by the
US, has insisted that imple-
mentation of a UN plan for
internationally supervised elec-
tions in Namibia is conditional ,
on a Cuban pull-out That must
take place by June next year,
says Pretoria, matching a sev-
en-month countdown for Nami-
bia’s transition to indepen-
dence, tentatively scheduled to
begin on November L
Angola, arguing that Cuban
assistance is needed to counter
the threat posed by Mr Jonas
Savimbi’s Unita rebels, has
proposed a four-year timetable,
which officials privately
acknowledge could he reduced
to about two years.
“What now remains to be
seen is whether the political
will exists to bridge tee gap,”
says Dr Crocker. Time for a
settlement is running out. The
three countries set September
1 as the deadline for agreement
on the timetable.
Protesters
keep up
pressure
in Burma
By Richard Gourlay in
Bangkok
ANTI-GOVERNMENT
demonstrators maintained
pressure on the military -domi-
nated r ulin g party in Burma
yesterday in countrywide pro-
tests demanding a change in
the 26-year-long one-party
political system.
Hundreds of thousands of
people gathered in peaceful
demonstrations throughout tee
country demanding a return to
democracy and tee removal oi
U Mating Maung. who was cho-
sen on Friday to be leader of
the Burma Socialist Pro-
gramme Party and president of
tee country, diplomats in Ran-
goon said.
Only three days after being
chosen as tee most likely man
to placate a country alight
with protest, U Muang Maung
has clearly been rejected by a
huge section of Burmese soci-
ety as yet another party man
representing a discredited sys-
tem.
Doctors, lawyers, actors and
singers joined tee student lead-
ers who have led demonstra-
tions in which thousands have
probably been shot dead by tee
army over tee past two weeks,
diplomats say.
“The demonstrations must
be threatening the Govern-
ment now," one diplomat said.
The Government and its auto-
cratic leaders are still believed
to be under tee control of Gen
Ne Win, the man who ruled
Burma since democracy was
dropped 26 years ago. The gov-
ernment in Rangoon appears to
be unprepared to concede any-
thing substantial to what
seems to be an overwhelming
majority of Burmese people
who oppose it
In Rangoon demonstrators
carried banners that said “we
want democracy - nothing
else” while others said “This is
the answer to the Govern-
ment's call to test public opin-
ion" referring to a commission
13 Muang Maung set up on Fri-
day to test tee desires and aspi-
rations of Burmese people.
Yet again the Government
made no public statements
about the demonstrations. Dip-
lomats said the pressure may
be beginning to tell on the
thousands of soldiers who have
been brought into Rangoon
and who have had to stand by
as speaker after speaker has
denounced the Government
they are defending.
Marshalls are emerging as a
kind of street leadership for
the demonstrators, who lack
any kind of formal opposition
structure either at home or
abroad. They have given
orders that tee soldiers should
not be provoked in the streets.
Two weeks ago the army shot
dead up to 3,000 unarmed dem-
onstrators, diplomats believe.
Copenhagen HandelsBank
INTERIM REPORT 1988
The Copenhagen HandelsBank Group
Group profits from primary operations (profits before provisions, depredations, extraordinary items,
revaluation of Securities and taxes) amount to Kr. 6916m compared with Kr. 5197m for the first half of 1987.
When primary operating results are measured against shareholders' funds the return on capital em-
ployed is 209 per cent pa. for the first half of 1988 against 170 per cent in the first halt of 1987.
The consotidafed balance-sheet total was Kr. 1233 billion on June 30, 19881, which is Kc 2.1 bOfion lower
than at hail-year 1987.
PROFIT & LOSS ACCOUNT for first half-year
(million kroner)
Group
1988 1987
Parent company
1988 1987
Interest and commission on loans and mortgages
2,840.6
938.5
2.667.7
1.160.8
758.9
2^441.6
889.9
693.2
2^327.5
1,1185
672.1
Interest from banks, etc., and other interest income
823.3
Total Interest received, etc —
4,802.4
4,587.4
4,024.7
4.118.4
1 merest on deposits
Interest on subordinated loan capital
Interest to banks and other interest paid
1,645.2
134.3
1.332.0
1,787.1
129.8
'1,3525
1,593.9
134.3
1 .007.4
1,742.8
129.8
1.066.1
Total interest paid
3,111.5
3,249.4
2,735.5
2,938.7
Net income from Interest and commission
1.490.9
1,338.0
1,289.1
1.179.7
Profit on and revaluation of foreign exchange
Other ordinary income
96.7
290.3
34.4
245.6
90.7
2S6.9
63.4
241.9
1,877.9
1 .618.0
1,636.8
1.485.0
801.9
740.6
7622
719.8
Other expenses —
384.4
357.7
351.6
343.3
Total expenses
1,186.3
1.098.3
1,113.8
1.063.1
Profit before provisions, depredations, extraordinary items,
revaluation of securities, and taxation
691.6
519.7
523.0
421.9
NOTES TO PROFIT & LOSS ACCOUNT
Revaluation of securities:
Capital loss/gain on
430.3
-223.3
412.7
-226.1
1062
82.7
152.0
128.7
Mortgages — -
8.3
2.9
85
25
544.8
-137.7
573.0
- 945
of which relating to the Bank’s combi-pension pods
87.9
- 14.7
87.9
- 14.7
4565
-123.0
485.1
- 795
-
-
505
41.6
Prospects for 1 988 - the Group
As forecast in the 1987 annual report, Copenhagen HandelsBank still expects a substantial improve-
ment in the primary operating results for 1988. Net profits are expected to represent a satisfactory return
an the capital employed by the Group. In other words, a return better than the return on portfolio invest-
ment in bonds.
The net profits of the Group wifi naturally be very much dependent on general trends in the Danish eco-
nomy - including exchange-rate trends and, not least, interest-rate trends. However, the reduction in the
Bank's securities portfolio In the first half of this year and the continuing short duration of the portfolio
does mean that interest-rate sensitivity is reduced lo a minimum.
The consolidated profit and loss account tor the fast six months does not include provisions and depre-
da ton end extraordinary items, since fosse are precluded by foe accounting standards oi the Danish
Financial Supervisory Authority.
fn the first six months of 1988 the requirement for provisions increased, in particular on loans to the
personal sector. As a result, total provisions for foe full year are expected to show a fairly big increase as
compared with 1987.
When evaluating the expected profit tor 1988, analysts should also take into account an extraordinary
expense of about Kr. 50m, which is Copenhagen HandelsBank's share of the first payment to the new
Depositor Guarantee Fund,
The Copenhagen HandelsBank Group stffl has a tax deficit of about Kr. 500m left over from 1988,
which can be carried forward to 1988.
St ; :VJ. ■: ' '
\
V
4
■IV "> =r.^J: Vt.'-v ,>■? rr
HNANOAL TIMES WEDNESDAY AUOUST
24 1SS8
AMERICAN NEWS
El Salvador
left-wingers
to contest
election
Quayle runs into more controversy
By Lionel Barber in Washington
By Tim Coone in Managua
TWO opposition leaders in £3
Salvador said yesterday they
would take part in presidential
elections next March.
Mr Guillermo Ungo, presi-
dent of the National Revolu-
tionary Movement (MNR) and
Mr Ruben Zamora, president of
the Popular Social Christian
Movement (MPSC), both of
whom are linked to the left
wing guerrilla forces, said they
wanted to test the govern-
ment's desire for peace in the
war-torn country.
Both leaders went into exile
earlier this decade following
threats by death squads and
the murder of other opposition
politicians. Both returned to El
Salvador earlier this year after
Vice President George Bush’s
running-mate Senator Dan
Quayle of Indiana returns to
the campaign trail today
dogged by controversy bat
determined to stay on the
Republican ticket
Despite vigorous endorse-
ments by Mr Bush, Senator
Quayle continued to draw fire
from the American press yes-
terday while several Republi-
can party leaders voiced
doubts about the Vice Presi-
dent's choice.
The Quayle controversy has
become almost the sole focus
of the American presidential
rampsrfgn since the 41-year-old
Indiana Senator admitted last
week that he used wealthy
family contacts to secure a cov-
eted place in the National
Guard, thus avoiding combat
in Vietnam.
It has become almost a trial
of strength between the Bush
campaign and the American
media which is pursuing the
story voraciously. It is still
unclear where the sympathies
of the American public lie,
though Senator Quayle
received a rousing reception at
a Veterans of Foreign Wars
convention in Chicago on Mon-
day night.
While Mr Bush’s advisers
have decided to ride out the
storm, buoyed by post-conven-
tion polls that show him ahead
of Mr Dukakis, fresh allega-
tions surfaced yesterday about
Senator Quayle’s association
with a Washington lobbyist
who later posed nude for Play-
boy magazine.
The allegations coincided
with a Wall Street Journal
report which said that Senator
Quayle had flanked a political
science course at university,
one day after the acci-
dent-prone Senator said on
television that he was a "pro-
verbial C-plus student".
Mr Tommy Thomas, chair-
man of the Bush steering com-
mittee in Florida, said: "I think
Quayle should assess and if lie
feels like he is hurting the
ticket, he ought to be man
enough to step aside."
Governor John McKernan of
Maine said that when Senator
Quayle’s name first came up at
the Republican nominating
convention in New Orleans
last week, he reckoned it was a
mistake. "Unfortunately, I’ve
been borne out to be right.'
Governor Thomas Kean of
New Jersey, who delivered the
key note address in New Orie-
ana . "We bsveyetto see
whether or not he grows into
the stature that the vice presi-
dential candidate should have."
While tike flap over Senator
Quayle’s Vietnam war record
may soon subside, other
embarrassing disclosures in
the US press about the young
Senator’s past will keep the
con tr ov e r s y alive, much as
happened to Mr Gary Ha rt, the
former Democratic presidential
candidate. "He may die of a
cuts," said Mr Jim
Bacchus, an expe ri enced Dem-
ocrat lawyer In Florida.
The Cleveland Dealer
reported yesterday that the
Indiana Guard that Senator
Quayle joined in May 1968 had.
a near freeze on enlistments
starting seven weds before he
signed up. He subsequently
found a mot in a public rela-
tions uuft-
The Los Angeles Dally News
reported that two farmer attor-
neys for the onetime lobbyist 1
Paula Parkinson said that she
had told the FHZ in 1981 that
Senator Quayle had proposi-
tioned her during a Florida I
golf trip
The attorneys said they had !
reviewed notes of their inter- <
views with the FBI at the time.-
The FBI however later found
no evidence that sexual
favours had been traded for
Congressional votes.
Political killings
raise heat of
Mexico poll row
By David Gafdnar in Mexico Cfty
THE process of reviewing
Mexico’s disputed election
results faced further hold-ups
yesterday, after the murder of
four students linked to the
left-wing opposition.
The four young man yam
shot dead in tiuar «iaa
working-class district of
MexicoCity, in a sbnflariy pro-
la reviewing congressional
results district by district,
prior to constituting them-
selves formally as the Electoral
Colletts, which must ratify the
presidential election.
The PRI, as things stand,
could win only 250 seats
n g »rtn«t 210 for the opposition.
Opposition leaders say they are
MexicoCity, in a siwflariypro- to Jet through wUh-
f-narinnai style to the election * de ^ atB all but SO or 40
eve assassinations of two i dose rnK where ballot rigging is
aides to Cuauhtemoc gpspected.
the left-wing nationalist leader. Sunday night, there was
the Esquipulas peace accords,
in which the government com-
mitted itself to democracy.
Their two organisations form
part of the Revolutionary Dem-
ocratic Front (FDR), seen as
the political wing of the Fara-
bundo Marti National Libera-
tion Front (FMLN), the guer-
rilla army fighting the
US-backed government,
although the FMLN and the
FDR differ over whether to
contest elections and the con-
duct of the war.
The FMLN boycotted last
year's National Assembly elec-
tions in which the far-right
ARENA party defeated the
Christian Democrat party of
President Napoleon Duarte.
Earlier this year the FDR
formed a new grouping with a
third politi cal pa rty, the Social
Democrats (PSD) known as the
“Convergencia Democratica”.
The three parties are expected
to form an alliance for the
presidential elections. Leaders
of another left-wing party, the
UDN (National Democratic
Union) returned to El Salvador
last July and an announce-
ment is shortly expected from
them on the elections.
On the military front, the
army recently admitted suffer-
ing 2,000 casualties over the
past year. The FMLN claims to
have inflicted 3.750 casualties
on the army in the first six
months of 1988. The FMLN also
claims the death squads make
fair elections impossible. They
say that in the same period
security forces have been
responsible for 273 murders
and the disappearance of 289
opposition activists.
Keeping Right at America’s crossroads
Deborah Hargreaves examines the political roots of staunchly Republican Indiana
MR TOM BROWN, a real estate
developer in Hammond, Indi-
ana, is in no doubt about who
will get his vote in this year’s
presidential election. Tm for
Bush and a tough line on
defence.” he says.
Dan Quayle, Republican Sen-
ator for Indiana and George
Bush’s running mate in the
November election stands with
his fellow “Hoosiers" of Indi-
ana with his hawkish stance
on defence issues.
Mr Brown, who was plan-
ning to leave the country if the
Rev Jesse Jackson had come
anywhere near being elected, is
typical of this rustbelt town of
north-west Indiana, where trim
frame houses abut gloomy
steelworks and factories.
Like most of the Mid-west,
Indiana is a land of smoke-
stacks and grain elevators,
with a majority off its 5m resi-
dents clustered in small, strag-
gling towns like Hammond.
Indiana is also strong on law
and order - one of Mr
Quayle’s themes - and is one
of few states to extend the
death penalty to minors. It is
currently holding a 14-year old
from Gary on death row for
stabbing bar bi hl e teacher.
But the privileged Mr
Quayle’s own brand of "coun-
try club Republicanism” is at
odds with the traditions of the
state’s predominantly manu-
facturing and agricultural
workers. Indiana preserves a,
staunch Republican tradition
’ rooted in its smalltown conser-
vatism.
“This is a state where you
see* people voting Republican
who would certainly be voting
Democrat if they were in Illin-
ois or Ohio,” says Mr Jack
New, who served 10 years as a
Democratic state treasurer.
Indiana lies at the heart of
the Midwest, with a state
motto proclaiming itself the
Crossroads of America. But its
firmly entrenched conservative
values often set it apart from,
its less-decided neighbours. 1
The state has voted Republican
in every election since the war
except 1964, and has elected a
Republican Governor for the
last 20 years.
"Here you don’t really have
a choice between a conserva-
tive and a flaming liberal,”'
says Mr New. It’s all either
conservative or more conserva-
tive." Even Democrats are
forced to run very conservative
campaigns and their renutidate
in the gubernatorial race, Mr
Evan Bayh, is a Democrat who
is running a wunp ai g n centred
around efficient government
and a pledge to keep taxes low.
Mr Bayh, as the son of long-
time Democratic senator Birch
Bayh (who was voted out in
1980 in favour of Mr Quayle),
enjoys considerable personal
prestige. He is tipped to be
voted in as Governor this
autumn.
Indiana is a state at the cen-
tre of the rustbelt, with one
fifth of the nation’s steel pro-
duced in its north-west comer.
Ford predicts job cuts to
compete with Japanese
By John Griffiths in London
FORD of Europe still has a
long way to go to match the
productivity of the world's
most efficient - mainly Japa-
nese - carmakers and will
need further cuts in its work
force, according to Mr Alex
Trotman jts new chairman and
chief executive.
The action is being foreshad-
owed by Mr Trotman despite
Ford of Europe having cut
employment by 40,000, to
100,000, since 1979 and its out-
put of vehicles having risen
slightly from 1.7m that year to
a forecast 1.8m in 1988.
Mr Trotman, in an interview
with the Economist Intelli-
gence Unit*, said that Ford bad
not drawn up a firm job cut-
ting programme. "It might be
zero cutback for a couple of
years or 6 per cent in one year,
depending oqnjjpw the work-
load goes." £>
“It will be necessary to
become considerably more pro-
ductive than we are today if we
are to remain competitive with
the best companies in the
world," he warned.
British-born Mr Trotman, 54,
who had been Ford of Europe's
president since 1984 before tak-
ing over the chairman and
chief executive's role in March,
said that Ford was committing
a further $lbn in quality-re-
lated investment over the next
five years in addition to $lbn a
year already scheduled in capi-
tal investment.
However, he ruled out any
completely new production
facilities for them. "The invest-
ment we have in mind for
capacity increases is all within
the walls ... we don’t have
any new plant in mind".
Mr Trotman dismissed sug-
gestions that the strength off
the D-Mark would lead to Ford
shifting its production plans in
favour of lower-cost countries
such as Spain - where, for
example. Volkswagen now pro-
duces the Polo model having
bought the Seat group.
West Germans were already
waking up to the fact that the
country had become too expen-
sive, said Mr Trotman, and
they would soon respond to
that realisation “strongly.”
*European Motor Business,
quarterly from Economist Intel-
ligence Unit, PO Box 1DW, 40
Duke St, London WlA 1DW.
£225 or $445 p.a
Australian group to build latex
plants in Sri Lanka, Thailand
By Chris Sherwell in Sydney
PACIFIC DUNLOP. the
Australian-based multinational
industrial group, yesterday
announced it would spend
ASTOm building two new facto-
ries in Sri Tanka and Thailand
“to meet strongly rising world
demand for latex products.”
Through its Ansell rubber
products division, the group is
the world’s largest supplier of
surgeon's gloves, medical
examination gloves and con*
deans. It also has nearly 10 per
cent of the world market for
balloons.
which are expanding princi-
pally because of the worldwide
AIDS scare.
The new factories are
designed to maintain Ausell's
position in these markets.
Pacific Dunlop said the Sri
Lankan facility, to be built
near Colombo, would be prod-
ucing gloves and condoms by
the end of next year and would
employ 1,000 people at full
capacity.
The decision, a sign of confi-
dence in the strife-tom coun-
try, was made because of Col-
ombo’s good port facilities, the
factory’s location in an export
zone and cost attractions.
Pacific Dunlop said in a state-
ment
The Thai factory, located
next to Ansell's existing facili-
ties near Bangkok to promote
economies of scale, is to be the
group’s main international bal-
loon production centre.
Separately, the group also
announced plans to consolidate
its balloon packaging and
printing operations for the US
market at Ansell’s existing
facility in Juarez, Mexico.
It irill employ balloon-mak-
ing technology developed by a
Los Angeles company Pacific
Dunlop acquired last year and
wfl] enable Ansell to increase
its balloon capacity by more
than 100 per cent within 12
months and to quadruple it
within three years.
Swiss engineering sees rise in orders
By John Wicks in Zurich
SWITZERLAND’S engineering
industry had an unexpectedly
good first half; according to the
Swiss association of machinery
manufacturers (VSM). Orders
received by 200 member com-
panies were up 13.4 per cent on
the corresponding 1987 period
to a total of SFrlO.ebn ($&6bn).
Although new business was
lower in the second quarter
than in the preceding three
months, VSM said yesterday
that the "positive trend” had
continued despite earlier Seats.
Swiss metal and machine-
building companies maintained
their strong position on world
markets, export orders rising
by as much as 1&5 per cent in'
the first half to SFrfMJbn.
means that manufacturers bad
an overall backlog correspond-
.ing to 12 months' production,
compared with 6.8 months a
year earlier.
With domestic orders up &5
per cent to SFrtfbn, orders in
hand rose by 2 per cent over
the year to SFrl6bn. This
Dr Martin Erb, VSM director,
said the international market
had proved more resistant than
bad been feared after last Octo-
ber's stock-market crash and
the subsequent w eakening of
tile dollar.
Dan Quayle: rustbelt
Republicans in his home state
and a strong motor parts
industry linked to Detroit in
the north-east These regions
were threatened with near-de-
sertion in the industrial
retrenchment of the early
1980s. but are now booming
again on the back of a lower
Hniigy arid a manufacturing
revivaL
Nevertheless, although some
laid-off workers are back in the
blast furnaces, the rustbelt is
run on a slimmer workforce
than before. Unemployment in
Gary remains stuck at 8 per
cent — above the state’s aver-
age of 4.5 per cent and the
national average of 5.4 per
cent The once- strong steel
T yn i rms have lost their grip and
many smaller plants are us i ng
non-union labour, undercut-
ting the traditionally high
wages of the steel industry.
The state has seen its popu-
lation drop in recent years as
workers have headed south for
jobs. This reverses the trend of
the last century, when
migrants flocked to Indiana
from yontnflky and the Caroli-
na a, bringing with the m co n-
servative traditions. "What
many people forget is that the
southern third of this state is
an extension less of the Mid-
west than of the Sooth," com-
ments Mr Tim Tilton, vice
rhairmnn of the Rlnnming ton
County Democratic party.
The Southerners brought
with them strong evangelical
hwiigfc, and an influential Bible
Belt nestles in the rolling corn-
fields Of SOUthem TmUana. a
controversial issue in this
year’s gubernatorial race is a
referendum on the ip galisstinn
of gambling with the introduc-
tion of a state lottery, which is
expected to mobilise many
Religious Sight voters.
The strong Republican party
organisation and tradition of
patronage have helped mould
Indiana's values in recent
years, and even Mr Tilton
admits that the Democratic
party has been “lethargic’’.
“There is a great fear in this
state of government becoming
too large,” says Professor Buss
Hampton, in the political sci-
ence department of Indiana
The car, fitted with a loud-
speaker, belonged to the Ififc
wing activist father of one of
the students, and. bad been
used to mobilise protest to his
district against the official
results of the July 6 elections.
These gave victory to Mr
Carlos Raftwas de Gortari, the
cases where ballot rigging is
suspected.
On Sunday night, there was
an uneasy stand-off to Con-
gress between army troops and
opposition deputies, who tried
unsuccessfully to gain access
to the ballot boxes, kept under
armed guard in the basement
o£ the Chamber of Deputies.
Mr Poxflrio Munoz Ledo. the
former FRI president and chief
University. “It’s really ‘a cany-,
over from 19th century attl- I
tudes; a lot of Hoosiers take j
pride to the fact that they don’t 1
take advantage off the federal
money available to them." :
For this reason, government
to in tiinTiH is run on a shoe- •
string. Successive Republican [
gfiwiiwis t y«tim$ have put a pri- i
ority on attracting new indns- j
try to tire state, particularly 1
offshoots of. the car industry. \
as well as keeping unemploy - 1
ment and taxes low. However,
little has been spent on the
state’s in fr astr uc ture and noto-
riously poor education system.
The southern part of the
state; with its undulating corn-
fields anil picturesque court-
houses, has been blighted this
year by the Midwest drought.
As shrivelled crops have been
ahan<fnnfl<i by sweating farm-
ers, the Democrats have tried
to on fppHngg of irri-
tation at any delay in federal
drought relief. But the farm
vote is expected to remain true
to its Republican tradition.
Mr Boo Thrasher, who owns
a 500«cre cattle form just out-
ride Bloomington, is a commit-
ted Democrat, and wont talk
to any of fals fellow farmers
about pnUftiwt Wfln» of their
strong right-wing views. "But
we’re all worried about the
drought, the heat and this
greenhouse effect,” he says;
Despite the heat, there
uppers tifri* cfamoe of Indiana
wanning to Mr Thrasher’s
views.
Carlos Salinas de Gortan, ine ~
Institutional Revolutionary Carden as strategist, yarned
Party (PRI) candidate but their *]“*• ur *5f s
veracity is being contested by tion was cleaned up , the
mu. nMMMiHnn wnnld rielftv tno
•Blowy uuub Ti.l
both the Cardenas coalition
and the right-wing opposition-
In Congress the PRI and
opposition are at loggerheads
opposition would delay the
Electoral College until Decem-
ber 1, when Mr should
be invested as president.
Venezuela court orders
arrest of tyre executives
By Joe Mann In Caracas
A Venezuelan criminal court
ordered the arrest off the chief
executives of the country’s
three major tyre manufactur-
ers for raising their prices fay
25 per cent without govern-
ment permission. The order is
unprecedented.
The presidents of the Vene-
zuelan subsidiaries of Fire-
stone and Goodyear, as well as
the top executive at Neu-
maven, a tyre producer owned
by Venezuelan investors, were
accused of "price speculation"
in an action initiated by the
Government’s Superintendent
off Consumer Protection. Under
Venezuelan law, individuals
who sell "prime necessity
items" at prices higher than
those authorised can he sen-
tenced to Jail for between six
a nd 30 months.
This action, coming at a time
when the current Government
is trying to promote new for-
eign investment, is seen by
businessmen as a major official
blunder. One foreign executive
commented: "This type of arbi-
trary move makes Venezuela,
look very bad to international
investors, and mafcas me think
twice about recommending any
new investments here." _ .
The Administration, led by
President Jaime Lusinchi, will
end its five-year term next Feb-
ruary and is trying to slow
price rises during Its last
months. One press report said
that the arrest warrants were
meant to be a "lesson" to com-
panies raising prices without
official approval
The tyre' incident follows a
recent action by another court
that also caused negative reac-
tions among Venezuelan and
foreign investors alike. A mer-
cantile court ordered the Vene-
zuelan subsidiary of Owens-Ill-
inois, the American
glassmaker. to Bril a specific
share of its output to a buyer
at prices defined by the court
WORLD TRADE NEWS
Reagan signs
Trade Bill
and backs
Bush policies
EC to visit S Korea to ease tensions
By William Dawkins in Brussels
US President Ronald Reagan
signed into law a sweeping
overhaul of US trade roles yes-
I terday, offering some political
I credit for the tougher trade
stand to Mr George Bush, the
Republican presidential candi-
date, Renter reports from Long
Beach.
Speaking to a large audie nc e
of dock workers and digni-
taries at this busy port city
south of Los Angeles, Hr Rea-
gan said revised laws were
necessary to break down pro-
tectionist trade barriers and
Mock "international thievery”
of American ideas.
"And yet this bill is just the
latest step to that effort, which
began the first day [Vice-Presi-
dent] George Bush and I
entered office and has already
opened vast markets to Anted-,
can products all around the
globe." Mr Rea Kan t aW .
"It hasn’t been easy, but I
have never doubted our ulti-
mate victory, because we are
riding a global wave.”
The trade law represents
more than three years of work
by Congress to craft rules of
retaliation against countries
believed to maintain unfair
barriers to US exports. The
Senate gave its final assent to
the Trade Bill on August 3.
‘ There was broad bipartisan
support for stifTer rules to cut
US trade shortfalls - a record
5 171 bn to 1987. A principal
architect was Mr Lloyd Ben*
tsen, the former Senate
finance committee chairman
who Is now the Democrats’
vice-uresideatial nominee. The
US tradeshortfen for 1980, the
last year before Mr Reagan
took office, was $81.4bn.
Countries including Japan,
Taiwan and West Germany are
among the evident targets of
the new trade laws, which
have stirred widespread
resentment and criticism from
abroad. US trade officials will
he obliged to name countries
that ran persistent large trade
surpluses by using question-
able trade tactics. The officials
then must seek voluntary
improvements and retaliate if
negotiations fan.
Mr Reagan said that the US
in the future would “insist on
standards of fair play,” indud-
MOUNTING trade tensions
between the European Commu-
nity and South Korea will be at
the top of the agenda when an
EC delegation meets senior
ministers in Seoul next month.
Mr Willy De Clercq, Euro-
pean Commissioner for Exter-
nal Relations, win lead the EC
tpfrm in Hip fifth aimnal high
level talks with Korea between
September 13 and 16. Among
the sensitive bilateral issues
for discussion wfll be EC alle-
gations that its companies are
TTiPAting imfafr South Korean
trade barriers like high tariffs,
trading l ice n ce s and a restric-
tive import surveillance sys-
tem.
South Korea is meanwhile
accused of directing its exports
to the EC Hke a laser beam,
aiming at sensitive sectors hke
microwave ovens and video
recorders and selling at artifi-
cially low prices. As a result,
the EC trade deficit with South
Korea rose to a record
Ecu2.6bn (£L7bn) last year, up
from Ecn572m fa 1985.
Mr De Clercq is also expec-
ted to repeat appeals to South
Korea to cut shipbuilding
capacity and to raise prices. He
will remind Seoul that the EC’s
patie n c e is wearing thin at its
continued refusal to join inter-
national efforts to restructure
shipbuilding.
Another sore point is the
EC’s claim that its companies’
patents are allowed inadequate
legal protection in South
Korea, compared with that
afforded to their US competi-
tors. Brussels last year with-
drew the trade privileges
allowed to South Korean
exporters to the EC under the
generalised system of prefer-
ences, in retaliation for Seoul's
refusal adequately to improve
patent protection for European
The Commission . also
believes the South Korean
authorities are discriminating
unfairly in favour of US insur-
ance companies operating to
the country.
The Commissioner is to meet
the South Korean trade and
industry and foreign ministers,
as well as President Roh Tae
Woo. with whom Mr De Clercq
is expected to discuss broader
international issues.
These are expected to
include the Uruguay round of
talks in the General Agree-
ment on Tariffs and Trade, in
which Seoul wants to play a
more prominent part, relations
with Japan and the US, and
East-West relations.
Seoul looks for fair play from EC
Maggie Ford and Caroline Dewhurst report on worries in S Korea
tog identifying and acting
against countries that make
and sell goods to the United
States which copy American
technology.
C oncern is g r o win g m
South Korea that it is
becoming the victim of
a European Community plan
designed to restrict imports,
particularly electronics.
Reports that the EC Commis-
sion plans to impose dumping
margins of up to SO per cent on
South Korean-made video tape
recorders have also h*rf ghtewpH
worries that investigators
looking into the allegations of
dumping are not behaving to a
fair manner.
Three South Korean con-
glomerates, Daewoo, Samsung
and Goldstar, have voluntarily
suspended exports of VTRs and
colour television sets for the
past month to advance of the
EC ruling expected shortly.
The suspension follows a
surge of VTR imports to the
first half to 700,000 units,
against an expected total for
the whole year of 830,000.
Exports to the EC of VTRs
were worth $31 7m last year,
and have risen sharp l y since
1985 when exports totalled only
74JJ00 units.
The export surge, which has
clearly sharpened European
perceptions that the South
Koreans are engaging in dump- '
tog, appears to have resulted
from currency c al cn fa ti ftw*
EarBer to the year, to line with
government policy to diversify
exports from the US which last
year ran a trade deficit of
$9Abn with South Knrpw . man-
ufacturers developed new mar-
kets in both Europe and Japan.
They calculated, correcfly as
it tu rn ed out, that the South
Korean currency would appre-
ciate against European curren-
cies and the yen in the second
half of the year. This prompted
a rush cf shipments to the first
half which coincided with
buoyant European demand,
cutting into the market share
of both Japanese and European
companies.
The action against VTR
impo rts is on e of eight anti-
dumping suits pending a gainst:
South Korean companies. The
others involve microwave
ovens, small screen colour
TVs, videotapes, polyester fihn,
polyester yarns and oxalic and
gfatawir arirfo ,
A complaint about footwear
exports, mainly to Italy,
appears to have been set aside
following a voluntary restraint
agreement The EC recently
upheld its first complaint in
the services industry, a gainst a
South Korean shipping Ene.
Pressure against ' South
Korea appears to have esca-
lated since the Asian country’s
products started to threaten
market share held by Euro-
pean manufacturers such as
the electronics giant Philips;
rather than simply reducing
the share of less competitive
Japanese imposts.
Companies in Seoul are ad-
eemed that European compa-
nies and officials regard South
Korea as a "second Japan,”
intent on gaming- market shar e
at any price. They note that
their products have a higher
profile in Europe than similar
products from other newly
industrialised countries such
as Taiwan or Hong Kong
because they are marketed
under the South Korean com-
panies’ own mnwaw.
The companies say. however,
that a number of differences
exist between Japan and Smith
Korea both in the nature of
their internal economies and to
their export strategy. These
differences, they believe, may
not yet be folly dear to Euro-
pean officials.
One difference relates to the
method of dete rmining dump-
ing margins, under which
Investigators compare the
export price off a product as it
leaves the factory with the
local price as it arrives at the
retailer, before taxes.
The size and complexity off
the notorious Japanese distri-
bution network, where layers
off middle men take their cut,
m e an s that dumping margins
are almost a foregone conclu-
sion. But the South Korean dis-
tribution system is quite sim-
ple Mid results, exporters say,
’to a domestic price that may be
httle different from the export
price.
In the case of a Daewoo mid-
dle range VTR for instance, the
South Korean domestic price is
won 243 ,000. jumpiagto a retail
price of won 365,000 when
VAT, consumption and defence
taxes are added. Daewoo mW
tiie export price off the VTR
varied between European
countries, if the VTR had to be
equipped for the PAL TV sys-
tem used to some European
countries, its export price
would be higher than the
domestic price.
He said that It would be
unprofitable for Daewoo to
export VTRs to Europe at
prices 30 per cent below Euro-
pean levels and the company
could not afford to do this to
.ga i n market share. Lower
wages and tighter budgets may
also contribute to lower domes-
tic prices than to Japan.
One foreign consultant dose
to the issue said an EC Investi-
gation in 1986 following dump-
ing complaints over microwave
ovens found margins that were
so s ma ll that the outcome of
the investigation has never
been officially d iscl o se d,
“It is d i fficult to see how the
EC could find dumping mar-
gins as high as 30 per cent for
VTRs," he said. “The compa-
nies should ask for the calcula-
tions to be revealed if the rul-
ing is confirmed. "
One result of that Investiga-
tion, however, has been a
senes of announcements by
South Korean producers set-
ting up factories to Europe.
The companies decided several
years ago that their strategy in
Europe should be different
from that pursued to the US,
where simply exporting goods
had invited protectionism.
South Korean companies have
now set up or announced plans
foJMaeariy a dozen European
factories.
They have not so far
otoratted attention under the
riew EC "screwdriver legisla-
tion. which affects companies
importing parts for local
assembly, mainly because
many of the factories are still
at toe stage of being set up.
Unless a better understand-
“E develops between Seoul
and Brussels, aggrieved feel-
ings may develop into more
•ban arguments about dump-
tog margin calculations, affcet-
mgthe long torn interests of
both rides.
•Ski
i 1
Ik
v
FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
THE IMPACT
BEARING STRUCTURE
OP THE
HONOCOQUfi BODY.
It Is a surprising fact that only Mercedes-Benz,
of all the world's car manufacturers, routinely test
their models for off-set frontal
collisions. . Why? Because
government crash test
legislation de-
mands that car
makers meet
requirements only
for 100% head-on collisions - so that is the "routine
they all follow. Except Mercedes-Benz. •
Their research shows. that in Germany, for'
example, 40% off-set frontal collisions happen three
times more frequently; so Mercedes-Benz design
briefs demand that all" chassis ' and crumple zones .
be tailored specifically, to disperse the unique
stresses of both types of collision. Which means
impact energy is absorbed . progressively
and displaced into forked longitudinal
members mounted onto . extremely rigid sidewall,
floor pan and transmission tunnel structures. The
energy is therefore diluted by being transmitted and
absorbed in three different directions.
A Crash Test Every Three Days
interests. Mercedes-Benz allowed it to be infringed
in everybody's interests, so other car makers could
incorporate the idea into their own body designs.
A gesture that speaks for itself.
In 1959. Mercedes-Benz became the first manu-
facturer to systematically crash test and roll-over
test their cars. In that year, 80 were destroyed in
Mercedes-Benz design
their cars for the accident
SCIENTIFIC CRASH TESTING. CIRCA I9S *.
the search for greater passenger security. Since then,
no car maker has placed greater emphasis on crash
testing, and many others reap the benefits simply
by adopting the results of Mercedes-Benz
pioneering research.
State Of The Art Safety Cell
that happens most
Mercedes - Benz conduct a
crash test every three days,
on average. Because safety
research is an integral
part of. the Mercedes-Benz
design_process. many tests
are conducted on compo-
nents and prototypes prior
to full scale production of a
new model. Consequently, the safety development
team are well placed to Impose their priorities on the
fundamental design of a can Today's Mercedes-Benz
models are the most thoroughly tested and safest
the company have ever built.
The Mercedes-Benz safety steering system, as
an example, is fitted with a distorting cup within
the steering wheel, and a collapsible, corrugated
column that will not intrude into the passenger ,
compartment in either a head-on or off-set
collision. Nor can the clutch or brake
pedals behave like blunt instru-
ments. Because
of the likelihood .
of severe.
accident injuries to the feet, the pedals : are
designed to swing away from the driver on impact
TUB. ENERGY ABSORBING
STEERING COLUMN,
The Fathers Of Automotive Safety .
The history of Mercedes-Benz safety cpn- v
scfousness dates from 1931 when they developed
independent front suspension ■ to ensure safer
roadholding. And : as long as thirty -seven years
ago! long before "crumple zone" and "safety cell"
became part of car industry jargon. Mercedes-Benz .
patented the first impact -absorbing body shell
But rather than protect the patent in their own
Engineered Like No Other Car
In The World.
Computer-aided engineering, combined with exten-
sive use of high strength, low-alloy steel, ensures
that Mercedes-Benz monocoque body shells are
not only light, but are also outstandingly strong.
Such a highly rigid shell is the basic safety element,
its front and rear sec-
tions designed to
yield progressively
in major accidents.
They absorb kinetic
energy and divert the full
force away from the passenger
safety cell. Strong cross-members are
built into the floor pan to stiffen
further the safety cell's resistance to
side impact. Additional single section
roof frame cross -members enhance the total load
bearing capacity of the roof in front, side and
roll-over impacts.
How The Use Of Air Can Reduce Injury Risk
All inertia-reel safety belts fitted
to the front seats of Mercedes-Benz
cars, have electronic belt tensioners
as standard. Above a predetermined level of impact,
the tensioner is activated and pulls
the belt taut around the body
in milliseconds, reducing forward
movement of driver and front seat passenger.
Above certain speeds, however, impact
injuries can still occur no matter
how sophisticated the seat belts are.
Therefore. Mercedes-Benz also offer FROM IMPACT SIGNAL TO
INFLATION IN 2S MILLISECONDS.
an electronically controlled airbag that is neatly
stowed in the steering wheel hub. This innovatory
safety feature has been available since 1981 and is
already fitted to 400.000 Mercedes-Benz cars. A
normally invisible guardian, it inflates in milliseconds,
under impact, to cushion the driver's head and greatly
reduce the risk of chest injuries. Further proof that
the Mercedes-Benz commitment to safety is uncom-
promising. unchallenged and continues unabated.
*
A-Z60FTL
I.
1988
UK NEWS
Army to scrap special car
plates in security move
By Tom Lynch in London and Our Belfast Correspondent
THE Ministry of Defence said
yesterday that tire distinctive
car number plates used by
British service personnel in
West Germany were to be
scrapped in a move to protect
off-chity service members of the
armed services and their fiumi-
The measure has emerged
from tire British Government's
emergency review of security
in the province after the bomb-
ing on Saturday which vm«H
eight soUders, wounding six
critically, and the death on
Monday of a navy recruitment
officer in a Belfast car bomb-
Toan King; the Northern
Ireland Secretary, was kicked
in talks with senior s ecurity
advisers in Belfast yesterday,
but was expected to By to Lon-
don today or tomorrow for a
meeting with Mrs Margaret
Thatcher, the British Prime
M ini s t er .
Mr King spent most of the
day in protracted discussions
with aides at Stormont Castle,
in a bid to finalise a package of
measures in response to the
recent wave of ter roris t mur-
ders in the province, the UK
mainland and continental
Europe.
IRA gunmen are thought to
have used ndhiary nmn ^
plates to pick out and kill a
serviceman in plain clothes in
the Belgian channel port of
Ostend earlier this mouth. The
Plates were thought to have
been a factor In other attacks
on off-duty British soldiers in
Europe.
Mr Archie Hamilton, the
junior armed forces minister,
said standard B ritish number
plates would be fitted to the
95,000 vehicles belonging to
service personnel and British
civilian support staff. This,
would cost up to £2m.
Army sources acknowledged
that British-registered care
parked outside dubs, bars and
restaurants in non-tourist
areas of G ermany would stiQ
stand out.
For the past few days, Mr
King and his advisers have
before the Prime L
These measures Inclu de the
deployment of extra troops in
Ulster, an end to suspected ter-
rorists' right to silence, and the
removal of Provisional Shin
Fein, the IRA's political wing,
from political influence by
speeding np proposals to
r e q uire election candidates in
Northern Ireland to take an
oath renouncing all farms of
violence.
ffirm y Wn Tipf ann MP-Mr
Gerry Adams, who has not
taken Ids seat at Westminster-
and several local coundHozs.
Pressure for a ban on the party
has been resisted in the past in
the groun ds that it would be
hard to enforce and another
front organisation would be
easy to form.
Sion Feta has already raid it
would take steps to avoid being
trapped by any new laws.
Although b itainmg n t without
trial, which is being demanded
■by Ulster Unionists, does not
appear to be a likely coarse ot
action, Sinn Frin said republi-
can activists were drawing up
contingency plans to co unt e r
tt.
Mr Adams, the party pcesfr
dent, said he understood repub-
licans ware treating the intern-
ment issue seriously. "Some of
the people opposing intern-
ment do so on the grounds that
they baHeve repubncans would
like it They should be opposed
to it because it is wrung and
has been discredited.”
fadwut nf afairHng n w i m-lte
review after the murder of
eight British soldiers near
Omagh, County Tyrone, on
Saturday and the murder of a
naval recruiting officer on
Monday, Mr Adams, the Gov-
ernment should have carried
out a fftHtiftai analysis of the
The man killed on Monday
was named yesterday as Lt
Alan Shields, aged 45, from
Ayrshire, the first naval officer
murdered in Northern Ireland.
Famborough
prepares
arena for
‘propfan’
By hdctiael Donne,
Aerospace Correspondent
THE WORLD'S first airliner
using the revolutionary "prop-
fan” engine arrived at the
Royal Aerospace Establish-
ment at Famborough, west of;
London, yeste rd ay . It wfll be
shown there at the interna-
tional air show from Septan-
ber4 to U.
The aircraft co m pri s es a US
Mf-n«mv>i] Douglas MD-80 air-
frame with one of its two con-
ventional jet wn gjwwi replaced
with a General Electric GE-36
jg
The XJEB airliner showing one of its finis
it
sively flight tested in the US
fliia summer, at E d wa rds Air
Force Base, California, this is
tiie first time It has been flown
outside the US.
The aircraft arrived at Eom-
boxoogh after a flight of more
than 12 hours, ft flew in easy
stages from Edwards Air Force
Base, via Mfanaanw jliv. Gander
(Newfoundland), and Eeflavlk
(Iceland).
It will stay in the UK for the
next two to three weds. Spe-
daHytovited airline executives
win be given demonstration
flights In the aircraft before it
is shown to air-show v isit or s
for the first time.
After that the airmail may
on to Western Europe
r etu r n i n g to the US, for
farther fftffl 1 * 1 testi n g
The prop-fan harnesses a
new type of propeller, shaped
more like a ship's screw man
conventional propellers, to a
without a gear-box.
The result, it is claimed, is a
power-plant that not only is
much quieter than conven-
tional jet engines, but also
offers lower pollution as well
as savings of qp to 25 per cent
in ftael consumption, while
driving the aircraft at near jet
all possible snags, they win
launch the venture into quan-
tity production.
At that point, the atrcraft
will be called the MD-91,
designed to seat up to about
100 passengers, for short- to
Tb» ri rpaff B fl w at Barnhnr .
ough is called a
demonstrator", designed
to flight-test the c
frame combination,
it has some seats in its passen-
ger cabin, most of the space is
gi ven ova- to flight-test mstru-
When McDonnell Douglas
and General Electric are both
satisfied that they have cleared
Both companies are now db-
cussing their plana with the
worid’s airlines. In an attempt
to win launch orders, espe-
cially from airlines seeking
new types to replace their
existing ageing fleets of 100-
plns seaters, such as UK-boUt.
BAC 1-llsand alder versions of
the Boeing 787 and 727 airiin-
ere. *
Later tins year oar eariynext,
fht> tama McDonnaQ Douglas
airframe will be used to l^ight-
test another prop-fan engine,
the 578DX burnt by PW-Alfison,
a joint company fanned by
Pratt & Whitney and ATHwmn
Division of General Motors,
both of the US.
The cost of shutting off disaster in the North Sea
Max Wilkinson looks at possible remedies after the Piper Alpha accident
E VER since the gas explo-
sion that ripped apart
the Piper Alpha plat-
form in the North Sea last
month leaving 167 people dead,
the oil industry has been anx-
iously wafting to discover the
cost of the extra safety mea-
sures it win have to put in
place. Because the sum might
be enormous, the industry has
also debated intensively about
Whut it ftwmito ii ftm.
gfliic — unH sensible.
Same of the more radical
proposals, such as insisting
that men and machinery are
housed in separate living quar-
ters, will doubtless depend on
the nmart of the flail inquiry
into the disaster, which may
not be completed until late
next yean
However, the general ontUne
Of what happened is now fidriy
well known in the industry,
and ministers are anxious to
press ahead speedily with the
more obvious remedies. This is
expecte d to be the burden of an
an n m nvwi iw if later <Ma nek,
asking the oil industry to sub-
mit proposals far fitting extra
safety valves to gas lines at a
cost of several hundred million
pounds.
. Whatever the initial cause of
the Piper Alpha explosion, it is
clear that the inferno was
fanned by huge quantities of
natural gas from one at the
three pipefines connecting into
the platform.
To prevent such an accident,
all natural gas pipelines are fit-
ted with an automatic valve
where they enter the lower
deck of the platform. That
should shut off the gas auto-
matically in an e me rgency, or
if electric power is lost But
what happens if a valve sticks
or is blown apart, as seems
windy at Piper Alpha?
In many of the larger North
Sea platforms, there is no sec-
ondary line of defence, and
nothing to stop the gas con-
tained in 20-50 kilometres of
pipeline pouring into the
breach. Eventually an operator
on shore or on another plat-
form would dose a valve, but
tint would not prevent the gas
already in the pipwWiw from
fbeDing the fire.
Such a danger has long been
recognised hi the ell Industry,
but until recently technology
was not considered reliable
enough to deal with it. The
obvious answer would be to
place a very large auto mat ic
valve in the pipeline on the
seabed. But valves some 400ft
under water are almost impos-
sible to maint ain and have
proved er rati c.
There is now a fierce debate
within the industry whether
the technology has become
reliable enougnto allow fitting,
cf underwater valves. Shell has*
been testing such equipment
with some success, out other
operators Dear the valves could
lead to expensive lasses of pro-
duction if they Jammed shut
and would be a safety haxard if
they jammed open.
The Department of Energy
appears determined to acceler-
ate the debate on the use of
Hifa equipme n t. The nnJwMn
valve can cost £3m-£4m to
fcwfain in Mm*, not co unt -
tog the cost of lost production
during Bmi mnd U SftaHfm,
could be a similar amount; at
least in the deeps: waters of
the northern North Sea.
Although a few million
pounds is by no means prohibi-
tive for a North Sea operator
even in theee straitened times,
the cost for the whole s ector
would be large. For SO to 40 gas
valves to the northern and cen-
tral sectors at perhaps Efim
each the cost would be of the
ostler of Mm*
Even so, some industry
experts say thataflarthehov-
roreof the Pfoer Alpha disaster
these measures would not be
enough. That is because an
undersea safety -valve would
have to be shea some distance'
from a ptatfonn, for an under-
water rupture could be highly
anywhere near a
However, that means that if
a fire started on the platform, a
Dull kilometre of gas would be
available to fuel fin fire even
after the valve shut down.
It Is partly because the
faihnhy jg bHTI ^ahiHn y Wu>
best solution, and partly
iwwnM> an jdaUom a are dif-
ferent, that the department's
di re c tiv e is likely to ask for
solutions rather than laying
down re quirem ents. Ho wewa;
the todortry knows that In the-
end it is going to have to lay
out a lot of money.
Row over ‘class’
definition splits
UK Communists
By Tom Lynch
GLASNOST, which strode tide
year's Soviet Gfimiiiist Party
arrived at
the City
ten 8? the party's
A prase c on for me s to 1 pres-
ent a policy dlscn ss ton paper
was peppered with arguments
between the hard-line and
revUmist factions of the Brit-
ish Communist Party. Even
one of the Joarnsflstr Joined
to.
A reporter from fl»e Mornin g
Star, the daily newspaper
which is contnriled by a barrl-
jipa faction which was
expdki from the British Com-
munist Party to 1S85, accused
the document's authors of
re writin g tiie definition of
f flrfal ^1— ■-
With Httie sadness, the
re porter Infarewd tha w “You
have got yet another serious
Ideological- split on year
Journalists were at one
point treated to the spect ac le
of Mr Gordon Mactennan, the
party's general wnt te y, who
benignly over the
;’s launch and the
sodate
of the very paper he
The dw-mnimrt Is bfilad as
-the first stage In
the party's p ra gt a s
tiie BritishBoad to __
and the section dealing with
does is bound to provoke, at
the very least, a signi ficant
B dUsudsose tiie ^ am-
1st picture of a ruling
wMch rente
controls the:
of production and which is
ranged against a class of the
waged, aigatag instead that a
“swathe” of weaken now con-
trolled a “productive asset"
such as wu. and tint they
were therefore in “contradic-
tory class locations."
tw, -was too in™Ti for the
Morning Starts man, who did-
iwt roi tin) definition of class.
Ito provoked a roughly
equal gpftt be twe en hard-Hnera
imd revisionists among tiie six
members of the eight-strong
dzxitfcsg committee who ware,
jpsjsenl. ■ ■ . .
B else put Mr Metam umn In
a d Uf i M lt postttan. His genial
smile did not flicker as he sold
he “would have to be no-
ehmed about some rftiwfo^
mulattoas,” esgcri aBy K
mtSwn bul been sug^s™
that f«nad worfcacs .w ge y
ct Oe «* ■
VSk
JeornaHst and
stools t camp, ad mitted that
definition was tofoej
hut ®mm A that it toon
ywH m t qf fee pci lfliel lesson s
learnt over the prat 20 year*.
However, Mr Monty Jobi*
■tone, a bsr*Bw foe^ed
it as “confined ana
winkers had nevwr been writ-
i
■ni |fnt wri tiUSe who OMW
the means of production. _ ;
SadnrefleuptertOTW
dres that the economic sectiA
of the paver passed ataosr
unremarked, although it
acknowledges the ro le atm xr-
kete and Includes pwpo«b
o m h as the intr oduction of a
wfai w wdi j ii stake for aQ 13*
year-olds and the mi min g up
wettonsaf state monopolies to
competition.
WhA Mr M m foim on made
dear foot tim party would not
be tofiaeaced by tiie Morotog
Star any more than fly other
“media commoatators,” the
paper's representative was
stung to respond that the
paper overturn ed, rather than
continued, the British Road
traditions and issued Ms warn-
tog of a split s'"'-"
• iMi dahgmoius tedk unified
tiw -comrades -even thosewho-
disagreed with the doc ument
sow it re forming Pmt of a
heaUhy disomriow, a concept
which is faiMflfar to stud Hits
of fissfperous left-wing groupe
hi Britain.
Bor Mr Hackman, tte docu-
ment carried forwar d the
peactfa tea dtHi m of
to Associate
himself from Mr Hacftennan,
Mr Johnstone insisted tint dls-
comtou was hreltiiy and told
the errant scribe: “The Idea,
font It constitutes .a epUi is
crepMabABlom 1 '
tladno Ujp to tAe Adam Pub-
lished as insert to Marxism’
Today, aJO firm newsagents
and bookstalls.
S TockmafketcooJdon s have cha ng o el
racScafiy since October1987.\bu
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uncertrinty and become mesmerised into
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Alice Rawsthom visits a rambling but repaired English stately home
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llilfUMi|i|Mi|||IIIIIIIIPMIIIIIIIIIIIIIilll« a llllllllillpnilillll||||||||iifl|||
i ' ll I' HJ IHMiiiiiiiiaiinf imi'ip hi iiuiiM it uiimmu
I I i ll. 1 \' I ’ tw I* «» ■ >-• H vi M ».] III II r • j II I ‘ ) iJK
M B' RICHARD Wake-
ford, administrator at
the connlry house of
Knale, is taforiated by tiie lack
of totawt .ffldifhftert by saaw
tourists. One party of Ameri-
cans emerged after four min-
utes to the enormous house,
only to he sternly told to
return and "look around
erly." When they
flntohwl they were so
astlc about Knole that they,
and their chauffeur. Joined the
National Trust on the spot.
Time is important at Knofe
The house, so the story goes,
was hunt with a temporal har-
mony. This dictated that it had
seven courtyards, one fax each
day of the week, 52 s t ai r cases,
for every week to the year and
385 roams, for each day of the
year.
The ahoy is frobatdy apocry-
phaL like most of the great
English co untry booses , Khola
was buflt over several centu-
ries from the 1400s, not to one
grand design. Thera axe cer-
tainly seven courtyards. But
the rooms and staircases have
never been counted because
there are so many and because
no core wants to qpaO. tire story.
However grand its begin-
nings, Knole has had to live in
recent years with the reality of
running at a kiss because of
tiie sheer scale of the property
«nd the crippling cod of its
mmmmm
[ - ' .u+* •:
1 • '“'I
but ready half tiw trees were
damaged . The debris should he
cleared by the end of the
but the task of :
trees will take decades.
Repairs apart, Knole cost
£338400 to staff; light and heat
last year. The Trust employs
three ffnH-thm* nfHrta lw. IimiM
by Mr Wakeflard as a dmtnlat ra-
tor, and tioee part-time secre-
taries. Other staff ore taken an
for tire summer season. Knole
also xeDee on 250 vuh mt eera,
mostly local membera of the
Trtist, to act as guides: answer-
ing questions and stopping
way ward children from leaving
* on tiw mar-
ia a sprawling mass of tow-
ers and turrets built of
and red stone in a vast
park on the outskirts of Seven-
oaks in Kent It Looks, as Vir-
ginia Woolf wro te in her novel
Orlando, like “a town rather
than a house, hut a town
bum .. .by a single architect
with one idea to his head." For
350 years Knole was the
serve of the Sackville
Now, like so many other am»i-
tzal homes, ft is owned and nm
by the National Trust, the
rhflritaWe organisation which
administers a large w n wiiwr of
historic buildings and
stretches of beautiful country-
side.
The house Is now open to tiie
pttbHc. The family has
itfreated to the north and
south wings. Tbs deer graze
_ _ txed camj with their
fawns. Sightseers swarm past
tiie Reynolds po rtra i ts In the
Crimson Drawing Room.
Knole is spared the coach-
loads of to urists that throng
more monumental booses such
as Ch ate w or th or Blenheim. Bg
attractions -a collection of
17th-century furniture and .
tramps Total frescos -are of
more esoteric appeal.
The house tends to attract
amateur historians in aansibte'
sandals or else bookish adofea-
Most of Kudo's income -
£158,400 in 1987 -comes from
the e nt rance fees charged to
visitors. The rest comes from
the income an the endowment
given by the Sackvffles when
the Trust took Over the prop-
as we ll as grants and
ate from the souvenir shop.
Wekefocd hopes to open a
tea room to generate more
income in the future.
Last year tire Trust provided
£174,000 to make m> the bal-
ance on Knole’s dafirft- Some
Trust properties, such as Char-
twelL jance ti ie home of Wto-
■aton ChurefaflL attract so many
visitors that they are profit-
able. Knole has a respectable
num ber of visitors -89^)00 last
T-but has always run at a
Knole: town rather titan a house," Woolf wrote
cents, moved by Virginia
Woolfs love for Vna SackvlQe-
West, the inspiration for
Gdando and «» of the most
ibmWwg of the SndcnDo.
The Trosttook orerKnote in
1947. The family made over the
house, its contents and part of
the. park- en a 200-year lease/
The Sackvffles pay a pepper
com rent for. flute apartments.
lor 1 flbe ifrtyHfih up per, clas-
ses, the post-war years -were
marked by rising costs, ^rirall-
ing taxation and a shortage of
B cr ynfai Many ftwfflst found '
it increasingly ^ttfficult to ding
on to their ancestral homes.
The Trust took aver & great
many historic houses to pro- ,
serve the bufidhigs and save
their art coBecthms from the
anctfon rooms.
Knole is one of ISO proper-'
ties -ranging from castles to
cotiages-opeiied by .tiie ^rust-
totfaepubnc.Inl947, when the
Trust took over Knole, the
property^ body needed rauuvte-
tion. Materiala and workers
were available for only the
most urgent repoira during the
Second Worid War. The sfidoe-
wprir was crumbUng, the roof
damaged and there were
of damp and rot
: tire home.
In the early 1900s tiie Trust
began a oostiy, 25-pear zezwva-
tton scheme. As an indication
of the scale of the" task, fiuh '
are' four acres of roof atKnote.'.
One mason spent almost 2fi
years restoring , the ^ stanewotk
- A record lOQjOOO vis itor s saw
tiie house in 1976, only for
attendance to fell in the late
1970s and rise again In the
early 1980s. This year the num-
bers have fallen, possibly
hecanse of the dearth of Ameri-
can tourists, deterred by the
weakness of the dollar; or per-
nogs purely because of thfa
sm i mipr 'a dismal weather.
The most diligent visitors
axnro when the house opens
and have when it doses. The
lerai afUgeut race around with
hr one man who was in and
o nt to minutes, a record to
bifo lia t e Mr Wakeford.
- The renovation was com-
pleted four years ago. But the
cost nf WHtnbrmtny fl y .
Is dfi 1 cripplingiy bi^L .Laist
year theTrust. spent almost
£190,000 on repairs, chiefly, on
chi mn ey s .'
This year's priority is the
park, which was devastated by
the storm that struck southern
England last autumn. The
boon emerged unscathed, the
raurou, UBTUmim
keeper, patrols the gatesto
undesirables.
occa s i ona lly gffp thnnuch. a
group of West. Germans wan
oncejound frolicking in the
SaAvIBe tf pri vate swinanlng
nooL-Arri. ttwiw i ti omw . . .. I-i!"
time to thm
MfeSISg
™ pot tack aaStafSK
.■ f
l r
i
If »ics:?as? ■
f $
i*
i' I!
It
IT - -
— . r
! M
7
[ ...
FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
UK NEWS
GDP increase reinforces fears over inflation
Economy pace accelerates further
By Ralph Atkins, Economics Staff
BRITAIN'S ECONOMY
continued to grow at an excep-
tional pace into the three
months to June, according to
official figures yesterday.
Central Statistical Office pre-
liminary estimates showed
gross domestic product
Increased by 1£ per cent in the
April to June period. Com-
pared with the same three
months a year before, it was
5.1 per cent higher.
The figures, based on the
output measure of GDP, show
little change in the
growth rate compared with
revised figures for the first
three months' of the year. How-
ever, the annual g rowt h rate
was slower at the ami of
1987.
The buoyancy of activity
reinforced fens that the econ-
omy is growing too rapidly and
to inflation. Most City
meat Secretary, said the foil In
the 33 eo«tiw to July was the
largest annual decline on,
record.
The flames show the num-
ber. of unemployed, for more
than six months in July
totaHed 1.88m - 2 15 par cent
lower than the same month a
of London analysts believe the
Government wffl have to raise
base rates soon -possibly to
more than 12 per cent - to
reduce growth- to a more sus-
tainable rate.
Other figures released yes-
terday show a Mg drop in UK
long-term unemployment in
July — again hi ghlighting the
strength of economic growth.
The number rfwtmtwg hwrwut
for more than ayear fell below
lm for. the first time in five
years to 948,000.
Mr Norman Fowler, Employ-
The number without jobs for
five years or more was 288JJ00
. in July, 14000 less than the
same time last year.
In flwpiri*! markets, the
GDP figures were poorly
received. Trade was nervous
largely in anticipation of
tomorrows UK trade figures
which are' widely expected to
show a current account deficit
of at least £lbn.
BariifT share pr i on * fo tfo in
Tokyo and New York further
upset equities. The FT-SE 100
share index dosed down 144 at
1817.9. Gilt-edged securities
also ended lower.
Fears about tim trade figures
are likely to be intensified as
■analysts scrutinise the GSO’s
annual digest of figures for the
UK balance erf payments
released today. This shows last
trade d£fidt inlB87 has
. revised up from the previ-
ous estimate of £L6bn to
Ifcfihn.
constraints on output," he
said.
In the year to the last three
months of 1987. the . output
measure suggests the economy
grewby nearly 5% per cent per
cent The average of all three
measures shows growth of
about 4% per cent
In the three months to June,
the latest estimates suggest
growth was spread across most
sectors of the economy apart
from oil production which
showed a Am-Htw co mpar ed to
ayear before.
Figures for non-oil GDP,
dhow economic activity was 5j6
p mit Mgter -than the «mw
a year before.
Norman Fowler: largest drop
in long-term Jobless
most reliable Indicator of
short-term movements.
Mr Bill Martin, chief UK
economist at Phillips & Drew,
said the growth rate in the first
six months of this year was
less than in the second half of
1987. However, this did not nec-
essarily mean overheating
pressures had subsided.
The CSO said a ctivity was
p ar H fU lq rjy «ftrr mg hi manufac-
turing and construction sec-
tors. In service industries, out-
put in the three months to
June was L7 per cent higher
than the previous three
months and 5£ per cent higher
than the same period a year
before.
K
Yeste r day ’ s output baaed fig-
ures are one of three measures
used by the CSO to show GDP
growth but are considered the
This could be the slowdown
in demand that we have been
waiting for. Or, more omi-
nously, it could reflect capacity
In London yesterday, the
onnd weakened against
Hark to end at DM3.2025
compared with DM32175 at the
previous close. Against the dol-
lar it ended at 4L8795 against
3L6765.
The Bank of England’s ster-
ling index fell 0^ paints to end
at 78J. The FT Ordinary huimt
dropped 111 to 14660.
Trade deficit revised upwards to £2.5bn
By Sknoa HoBtorton, Economics Staff
BRITAIN’S trade deficit in 1987
has been revised .towards to
« 9 flin from VI dm.
to official figures
today.
The Central Statistical Office
says in its annual digest of fig-
ures fear the UK balance of pay-
ments. known as the Pink
Book, that the currant account
deficit was revised upwards
because of a lower level on
reoepits from services together
with a higher level of imports
than first thought.
The revisions to the trade
figures are EkMy .to unsettle
UK financial markets which
are already tense ahead of the
release , tomorrow of bade fig-
ures for July. Inependent econ-
omists expect the deficit for
this year to rise by £Um in
July.
The CSO said tomorrow's
trade figures would show that
the wnT Mi t wrm n nt deficit for
the lint three Hwwiflm of the
year wre estimated to be £UIQm
greater, or £&9bn. This was
tan increase of £900m in
esparto.
The CSO said that the deficit
on visible bade in semi-man-
factored and manufactured
good widened to £7Abn in 1987
from£5.7bn in 1988. The sm>
ph» cm trade in ofi was t423m,
slightly higher than in 1988,
.but neariyhalf that of 1986.
The figures Mao show that
the crash in worid share prices
in October last year, generally
lower share prices, and a stron-
ger pound had the result of
reducing Britain's net assets
abroad.
In 1987 net assets were val-
ued at £89«ftm, compared with
£I132bn in 1986 and £8(Uttm in
1985.
Last year there was a net
disin vestment of ffiJflmbyUK
investors in equities and bonds
compared with purchases of
fiOm in 1968. Foreign invest-'
ment in British shares and
hands rose by £UMflm com-
pered with an Increase of
88 u4hn in 1986. .. .
Earnings on UK investment
abroad totalled £18Jhn in 1987,
of which direct In vestments
accounted for £10.7bn and
investment in equities and
bonds came to £S.5bn. This
compared with £l&5fan in 1986.
Last year, UK direct invest-
ment in industry and services
was £15.4bn, compared with
£LL5bn in 1986. Overseas
investment in the UK was also
higher at £6hn co mp ared with
£42hnin 1986.
The CSO estimated that the*
value of UK direct inv e stm ent
abroad was £ 9Mhn; tie value
of foreign i nv e stm ent in the
UK was £5&4hn.
United Kingdom Balance of
Payments, 1988 EcBtkm, CSO.
Available from: HMSQ. £9S5.
Investors in
Barlow
Clowes may
see higher
payout
ByCUva Wofanan
THE 11JXX) inv e stors in Bartow
Clowes International can
expect to receive much more
than 50 per cent of the money
that they have paid into the
offshore fond which has now
been put into liquidation.
A breakdown and valuation
Of t hfi and ^brfrruf qf P CI ,
on a best estimate basis rather
than following the much more
conservative and pessimistic
approach adapted by the liqui-
dators, suggests that they will
realise between £60m-£85m.
This does not include the
possibility that investors will
recover additional sums from
negligence suits against the
Trade and Industry Depart-
ment, financial advisers and
te fcp rmiMWflHBH, amHtliig firms
Of hanlcs.
Shortly after the Barlow
Clowes companies were put
into liquidation in June, the
liquidators suggested that less
than £40m of the Bd assets
may be recoverable.
The money invested in the
Gibraltar-based BCI fund is
thunght to have been slightly
over £100m, although the
raffing up within the ftmfl of
the inflate d rates of Interest
that Bd was offering its cli-
ents has boosted its potential
HflMHHflg tO about CIJWwi-
The less gloomy picture fol-
lows an upgrading in the valu-
ation of a variety of differen t
assets. Many of these are loans
-to companies which have
become insolvent but which
nevertheless have enough to
allow creditors to retrieve most
of their money.
One key figure is the amount
of BCI money tied up in the
James Ferguson industrial
bolding company to which BCI
indirectly made a £31m loan. It
also has a direct stake of 60 per
cent of its share and,
through the assets of Mr
Clowes which have been
assigned to it, an further indi-
rect stake of 25 per cent. At
one stage these stakes were
valued by the stock market at
more than £50m.
Mr Tony Richmond, an Insol-
vency partner of Peat Marwick
McLintock, the administrators
of James Ferguson, yesterday
laid to rest fears that the com-
pany may be insolvent.
Statoil to open negotiations
on gas sales to
By Karen Fossil In Oslo and Max Wilkinson fn London
STATOIL. Norway’s state oil
company, said yesterday that it
is to start negotiations with
British Gas in October for the
aimnai de l i ve ry of 5bn ftnhfo
metres (ban) af Norwegian gas
to the UK.
The negotiations will re-open
a priiHioai argument in London
on whether British fias s ho uld
be given an import licence.
After the UK Government's
decision three years ago to
veto a $30bn contract for the
import of gas from Norway's
SLetpner field, the Department
of Energy has taken a strongly
protectionist stand.
However, Mr Cecil Parkin-
son, the present energy secre-
tary , and a free trader by tem-
perament. might well be
sympathetic to a more moder-
ate scale of imports.
At a meeting in Oslo last
month Statoil Br it ish Gas
decided to pitch the quantity
for negotiation at between 5
bem and 8 bem or 10 to 15 per
cent of the corporation's pres-
ent requirements. Imports
would start in the mid 1990s.
However, a great deal of
negotiation will be needed in
the political as well as in the
commercial arena before a firm
contract can be signed.
Last night Ur J ames All-
cock, British Gas’s director of
petroleum purchasing, con-
firmed that tafleft with Statoil
were to take place, but said the
company was trimul taneou sty
talking to other possible sup-
pliers of imports, including
Algeria and Nigeria.
However, the company does
not appear to be talking to the
Soviet Union, which has huge
gas reserves and a large
amount erf spare capacity in its
pipeline to Europe.
Some analysts regard the
British Gas's talks with Nor-
way as being partly a tactic to
drive down prices in the UK
sector. For some years it has
also wanted to secure addi-
tional supplies to meet a poten-
tial gap between supplies and
demand In the late 1990s.
'Hie Sleipner deal foundered
on the UK Government’s fear
that large scale gas imports
would thre aten the develop-
ment of the UK's gas reserves.
That fear may still yet pro-
vafL At an offshore petroleum
conference in the Norwegian
west coast city of Stavanger,
Mr Peter Morrison, the energy
minister, said yesterday that
he was prepared to ensure that
the development of gas ora the
UK shelf will go ahead to sup-
ply gas into the 1990s.
British Gas’s interest In
imports intensified when it
appeared that reserves in Nor-
way's Frigg field, from which it
obtains about a quarter of Its
supplies, were some 50bcm less
than expected.
However, Elf Aquitaine, the
Operator of the Frigg field is
seeking to tap reserves which
it beleives may lie in different
levels the reservoir.
Cash needs. Page 17
Taylor Woodrow plans
property certificates
By Nfldd Tail
TAYLOR WOODROW, the
construction and property
group, said yester da y that it
planned to start realising prof-
its on its St Katherine’ s Dock
develo pment in London’s Dock-
lands through a pioneering
issue of property income certif-
icates (pines).
If the market develops, we
see ourselves as long-term
players,’’ said chairman Sir
Frank Gibb.
Pines are a mong the afagto
property asset Investment
vehicles which are presently
under development. The certifi-
cates will entitle their owners
to an or part of the rental reve-
nue of a building and a share
in the wnmagwiiMit company.
The underlying ownership of
the building itself, however,
wffi not change.
Tim opening of a market in
pupa pends ™ publication at
regulations from the Depart-
ment of Trade and Industry.
These are expected within the
next few weeks. Taylor Wood-
row said, however, that it
hoped the market would be
within six months. It
to make an issue in.
the first batch of certificates as
soon as this year. It is one of
the first companies to expres s
a firm interest in the market
The planned issue would
relate to part of the rental
income on just one of the 10
buildings comprising the St
Katherine’s Dock development
Taylor Woodrow said that it
was considering a couple of
possibilities, but declined to
say how much it expected to
raise through the issue.
St Katherine’s Dock, which
has been under development
for well over a decade and is
BtSl not complete, accounts for
about half of Taylor Woodrow's
UK investment property portfo-
lio. At the end of 1987, UK
investment properties were
valued at £400m, out of the
total £521 Hi portfolio.
Yesterday, Taylor Wood-
row -where Sir Jeffrey Ster-
and Oriental
ling’s Peninsular
Steam Navigation (P&O)
recently acquired an 8L5 per
cent stake -unveiled interim
profits up from to £34m
before tax.
Lex, Pago 14
Shipbuilders to
lay off 1,000
in Sunderland
By Kevin Brown,
Transport Correspondent
BRITISH Shipbuilders is to lay
off around 45 per cent of the
workforce at its threatened
North East Shipbuilders sub-
sidiary in Sunderland.
It slid lay-offs would begin
immediately and continue
Twitfi fim will of next month,
when around 1,000 workers
will have been sent home on 75
per cent erf basic pay.
There was relief in Sunder-
land that redundancies had
been avoided. But it emerged
that British Shipbuilders opted
for lay-offs only after last-min-
ute Government pressure.
The corporation bad
intended to make the men
redundant until late on Mon-
day evening. The decision was
changed after Mr Tony New-
torn the Industry Minister.
madti it clear that he wanted
all 2,250 jobs at North East
Shipbuilders to 6e maintain^
for the next few weeks.
Mr Newton is understood to
be keen to demonstrate that
the Government is willing to
do everything possible to keep
NESL intact while a private
sector buyer is identified.
iicnsffr
Euwasi
turkeys merchant bank
Au eacating contract in a new country.
Q^xatunity knocks.
Butwidiout the right advice it could all
gO horribly wrong.
IktisatBankasiisT
merchanrbank. In trade finance, in project
ive
business in Turkey we
can, meet all your needs.
For further information contact
Arthur Wilkinson on (901) 174 1111. Or write
to Iktisat Bankas, Buyukdere Cad. 165, Esentepe,
Istanbul, Turkey. Telex26021. Fax (901) 174 7028.
You’ll be surprised what we can do For you.
-- .
\
FINANCIAL TIMES WEDNESDAY
AUGUST 2* 1*8*
JOBS
Why careless talk could endanger skills
By Michael Dixon
"OLD Mrs Huston was terribly
cut up after her daughter died
on the operating table,”
announced a woman at the
afternoon coffee party. Her
adult companions responded
with sad nods and murmurs of
sympathy.
But the remark bad a very
different impact on the child
who grew up to be the author
James Thurber. He wrote later
that what the woman had said
kept him lying awake at night
for weeks, imagining the
gruesome scene.
He pictured old Mrs Huston
sitting in the operating theatre.
Then he saw the surgeons
taming on her with scalpels
flashing - after they had
finished with her daughter, of
course - and saying! “Now
Mrs Huston, are we going to
jump up on the operating table
by ourselves like a good girl, or
we have to be put there?”
That tale shows how things
most people say with scant
heed to their literal meaning
can worry someone acutely
sensitive to words. And those
who work with words, such as
the Jobs column, tend to have
an above-average sensitivity to
them although not (alas) to
anything like the sublime
degree possessed by Thurber.
Hence my puzzlement, albeit
mild by his standards, over a
certain word which people are
using more and more when
discussing work topics. At one
time its use in that contest
seemed confined to the City of
London and. being Inured to
the barbarous language spoken
there, 1 wasn't much withered.
But the other evening 1 was
alarmed to hear the word used
by the chief of a provincial
manufacturing concern.
“We had a recruiting drive
lately ” he declared “and I'm
glad to say we’ve managed to
take on a lot of good players.”
When 1 asked him what it
was they played, he looked at
me uneasily and said be must
move on. Which he did, leaving
me alone to wonder why he
and growing numbers of others
should speak of “players”
when referring specifically to
“workers”.
One possible reason is that
those who do so are unaware
that the two terms don’t mean
the same thing. For instance,
they might all have been
brought up as members of the
Yir Yoront tribe of Australian
aboriginals whose language
does not enable any distinction
to be made between work and
play as activities. It hardly
seems likely, though.
Another possibility is that
“players" is used, as it once
was in cricketing circles, to
denote workers who insist on
being paid for their efforts as
opposed to “gentlemen" above
such pecuniary gain. In the
City of London if nowhere else,
certain folk still wear some of
the hallmar ks of gentlemen,
including a signet ring on the
left little finger and a suit
which looks as though it has
just been mown.
While they could perhaps
afford to work for love alone,
however, none of them seems
willing to do a hand’s turn
without a company car and
cheap mortgage on top of a
vulgarly large sum of money.
So the explanation of the odd
use of language must lie in
some other context.
The one that seems most
probable - and which raises
disturbing implications - is
gambling . After all, “playing”
in the sense is surely a
pretty apt term for the primary
function of the finance sector.
But if the idea spread around
that the same constitutes the
central activity of other parts
of the economy, there could be
dire effects on the development
of other kinds of working skills
which lie at the heart of most
advances in well-being that
humankind has achieved.
For the work of making
thing s and providing the bulk
of services useful to people
cfc-iHa markedly different
from those of risking money,
no matter how successfully.
Otherwise, there would be
little point in the British
Government’s plan to improve
young people’s education by
focusing their attention on
Intellectually demanding
studies. It would be better to
model education on the Oxford
University of 150 years ago.
which was probably the best
training ground for “players'*
ever to exist Undergraduates
typically spumed all scholarly
study in favour of gambling
interspersed with huntin’,
shoo tin’, and fishin’.
That is not to say the skills
they acquired were socially
worthless or bereft of mental
rigour. For instance, sustained
success at the gaming tables
needs a mathematical ability
that few people possess, and
which is required in still
greater measure in City-type
trading.
Nevertheless - as I learned
from watching an electronics
engineer wor king spare-time as
a settler in a crowded betting
shop - it is not the same kind
of maths sfcfl] that is essential
to innovative technology and
science. He didn't get much
money for his Saturday stints,
he said. He just enjoyed the
figuring which, compared with
the demands of his regular
design job, was very relaxing.
The trouble is that, in
Britain at least, a good many
holders of high places seem
blind to such key differences.
Half a dozen times lately I
have heard top people, three of
them economists, welcome
redundancies in the finance
sector on grounds that they
will force “clever" City people
to “go and run industry”.
Those who actually ran it,
like the TnBTmfar t i irm g r.hiftf I
met the other night, would
probably not make the same
vacuous mistake, hi re fe r rin g
to bis staff as “players" be was
merely using a trendy wont
without thinking much about
it, which is something aH of ns
are guilty of repeatedly.
Even so, as George Orwell
said: “...the slovenliness of our
language makes it easier for us
to have foolish thoughts.” And
loose talk by someone In a
position of leadership makes it
easy for other folk to have
them too. So top industrialists
especially would do well to call
a worker “a worker*. Besides,
they are the people who will be
most terribly cut up if industry
dies on the gaming table.
Ups and downs in City
ANY “players” in today’s
congregation might find
Interest in the table below.
Based on figures from the
Jonathan Wren recruitment
consultancy, it shows the '
average changes in salary *
achieved by City of London
staff who moved jobs with
Wren’s help between. March l
and July 15.
Job title
Compliance manager
Lending officer
Assistant branch manager
Private-client hanker
O & M exe cuti v e
Legal officer
Financial
UK landing manager
Credit analysis manager
Equity trader
Senior lending officer
Bond sales/traders
Assistant fond manager
Investment traders
AH job-changers, March 1 to
ALL back-office staff + 13.4
The detailed data is limited
to types of staff with average
salaries of at least £25,000.
But the bottom two lines
refer to all ranks-
The general picture is that,
while no work category has
escaped cuts since Black
Monday, there is a fair
demand for most types of
staff seen as top performers.
Type of work
Back office
Front line .
Front line
Front line
Back office
Back office
Back office
Front line
Front line
Front line
Front line
Front tine
Front firm
Front line
July 15 1988
All front-line
% change
+- 40.6
+ 259
+ 2L1
+ 209
+ 179
+ 15.0
+ 143
+ 13.0
+ 83
+ S3
+ 29
- 23
- 63
- 6.7
+ 123
+ 93
I Senior
Sales
UK Equities
A number of leading houses are currently
strengthening their UK sales desks and
seek generalist salesmen with at least four
years experience gained within a
recognised house.
A proven track record and the enthusiasm
to succeed in this increasingly competitive
market are essential.
If you are interested in pursuing these
opportunities please contact
Charles Ritchie on 01-404 5751
(01-675 0670 evening or weekends) or
write to him at Michael Page City,
39-41 Parker Street,
London WC2B 5LH.
I M
Internal
London F
Michael Page City
International Recruitment Consultants
London Paris Amsterdam Brussels Sydney
ty
uhants
i Sydney
SENIOR CORPORATE
BANKING MANAGER
.tab
TSB Scotland has an enviable position in
corporate banking. This has been achieved
in a highly competitive and dynamic market
environment through innovative marketing
of a wide range of services and products.
We now have an exceptional opportunity for
a professional business development
executive who. reporting to the Assistant
General Manager— Corporate Banking, will
lead and motivate a team of executives in
the development of the Bank's industrial/
commercial banking business.
\bu should be a graduate and/or hold a
banking or relevant professional qualifi-
cation and have experience in corporate
financial business development Aged in
your 30's, you should have a thorough
understanding of credit analysis and
proven team leadership skills. The person
appointed will contribute to budgeting
and the setting of the department’s targets
and be responsible for their achievement
Salary will be commensurate with
experience and is unlikely to be a barrier
to the appointment of the right candidate.
Candidates currently earning less than
£20.000 are unlikely Id have the depth of
experience we are looking for. Benefits are
those associated with a major banking
group and include a can Assistance will be
given with relocation where appropriate.
Please write with CV to:
Alan Scott. Head of Personnel,
TSB Scotland pic.. Head Office.
PO Box 177. Henry Duncan House,
120 George Street, Edinburgh EH24TS.
The Bank of Bermuda Limited
0tt»n»rw‘d k Btrawta fai UNI .
TRUST OPPORTUNITIES
1 BERMUDA
The Bank of Bermuda Limited is an international banking, trust and investment management organisation with assets
of S4 billion and 1,500 staff in 8 locations worldwide.
Due to exceptional growth in our personal trust business we are looking for exceptional people to join us in Bermuda.
— Assistant Manager -
This individual will assume responsibility for the daily activities of a group of trust administrators and assist in the
development of new business. Interested candidates should possess a university degree or professional qualification in
the trust area, extensive technical knowledge of trusts, and excellent managerial and business development skills.
- Administrator -
This is an excellent opportunity for a career oriented individual to further develop expertise as a specialist in offshore
trusts and companies. Applicants should - have at least 3 years experience in offshore trust administration and be
making steady progress in the examinations of the Chartered Institute' of Bankers (Trustee Diploma) or a similar
qualification. - - , •
The Bank of Bermuda Limited offers an attractive tax free salary; generous settling-in allowance, relocation expenses
and benefits package phis the opportunity to enjoy- Bermuda’s unique climate and lifestyle. ' " :
Interviews wall be held locally In London between August 29th and September 9th. Applicants should telephone Mrs
Nea Roloff at Bermuda 010! 809 295 4000 extension 3320 dr transmit their av. by facsimile to her attention at 0101
809 292 3814 no later than August 29th 1988. 5
I Corporate I
Banking
Two exciting opportunities exist for young bankers to join a successful and expanding
department in one of London’s mayor AAA rated international banks.
Property Financier
You will join a small and highly professional team leading major financings both in
and out ofLondon. The bank seeks to make maximum use of a large balance &eet and
is committed to maintaining a significant presence in real estate. You will have
developed a sound understanding of the workings of property finance and the current
market.
UK Corporate Marketer
You will work in an established department covering major names from the UK Top
500. The bank is able to offer a wide range of services including both capital markets
and traditional credit-based products. You will also have the opportunity to work cm
specialist financings including MHO’S.
Candidates for both roles will be aged 25-30 and will have benefitted from a thorough
training in credit and cashflow analysis. They will have at least 2-3 years' relevant
experience and will have gained the maturity and confidence needed to conduct
transactions and lead negotiations on behalf of the bank and its clients.
The bank can offer an attractive salary and benefits package to the right candidates
and can promise a varied, yet secure, career with good prospects of promotion. In
return they will look for enthusiasm, innovation, d e dication and, above all, a flexible
a pp roach to corporate banking.
Interested applicants should contact the retained consultant, Mark Hartshorne
on 01-404 5751 or write to him at Michael Page City, 39-41 Parker Streep
London WC2B5LH.
I_
Michael Rage City
International Recruitment Consultants
London Paris Amsterdam Brussels Sydney
AT A CAREER
CROSSROADS?
Il takes a very special person !o
reach Ibc lop in one field only is do
bclier elsewhere but that is just Ihc
ton of person Hill Samuel Invest-
ment Services » row looting for.
ir you have wceesrfufly dealt wilh
people and finance in the pad, and
are now seeking a new start wilh the
chance or unlimited earnings (includ-
ing office fadltuet) at your own boss,
then please contact:
Joyce PoW, HO Samel breotmeat
Services, 3rd Flow, 1 Maddox Street.
London WIR 9WA. Teh 01-034 4583
REGISTERED
REPRESENTATIVES
Top Commission Plus —
For Effective Individuals
with Clients
Highly Successful (Full)
Members of TSA
01-895-1700 Mr Hershon.
VENTURE CAPITAL -
EUROPEAN RESEARCH
Emrepieneunar? EurophOeT Research
background? Then you have a unique
opportunity lo join an ambitious
sian -up inlonnauan company.
CaDio now on 01420 0802 or
01 -73S WIM. or lend jrour cv today
to Initiative Europe. 5.13 Boodvny
Brumes* Centre, 71 Bondmy,
London SWS iSQ
Investment Administration Manager
Woking, Sumy
The Crown Financial Management Group has a consistent and impressive
growth record that places us in the forefront of the financial services
revolution. In short, we're setting the pace in a voy competitive and fast
growing industry.
We are looking for an Investment Administration Manager to fill a key
position covering all administrative functions in our developing and
expanding Investment Division. . .
A significant dimension of the job will be the further development of our
computing capabilities.
This is a challenging role which would suit either an experienced manager
or younger professional seeking to develop his/her career.
You should be educated to at least 'A' level standard and be an excellent
motivator and communicator. You should also have a sound background
in Life and Pensions business with at least 5 years at management level in
Investment Administration.
To indicate the importance of this role within the Grotro, an extremely
generous salary will be paid together with substantial fringe benefits which
indude private healthcare, mortgage assistance and relocation where
ap pr o pri ate.
Please telephone or write with full CV to: | j~~ = ~ >i
Julia Skyrme, Personnel Department
ClOWn Financial Managem ent Ltd.,
Crown House, Crown Square, Woking,
Surrey GU211XW. Telephone: 04862 5033
'ft
1 FINANCIAL
MANAGEMENT
J
MKTG OFFICER
— PROPERTY
As a result of planned expansion in respect
of business generated tn London, an
established European bank seek to
appoint a high calibre person for a major
marketing function. The requirement Is to
establish and subsequently control a new
Commercial Property . section;
necessitating extensive knowledge of the
industry gained within a - banking
background, together with effective
management skills.
Salary c£50, 000 4 comprehensive
benefits package
GORDON BROWN & ASSOCIATES UHL
RECRUITMENT CONSULTANTS
SENIOR
MARKETING
A European Bank of high reputation,
especially active in London and currently
undertaking further expansion,
accordingly seek to strengthen the existing
team. The position offers a challenging
role to a well qualified commercial lending
banker aged 30-35 with experience of
generalist U.K. corporate business and
also carries considerable responsibility
requiring a relevant and appropriate
background linked to areas of current
participation.
Salary c£30, 000 + benefits
Including car
57/59 LONDON WALL, LONDON EC2M SIP
TEL: 01-628 7801
INTERNATIONAL PRIMARY MARKETS
INTERNATIONAL BOND ORIGINATION
We are expanding our International Bond Origination
Team and are looking for two experienced market
professio n als with the ability to win Bond mandates.
A proven track record is essential. Applicants should
have 2/3 years experience and a thorough knowledge
of capital markets products, particularly swaps»excellear
analytical skills and creative ability, and an in-depth
ability to structure market transactions.
A competitive ranuneration package will be available ro
successful applicants. Applicants should apply in writing
with curriculum vitae to:- Mark Godson, Personnel
Director Barclays de Zoete Wedd Limited, PO Box 188,
2 Swan Lane^ London EC4R 3TS, or direct to Neil
Hariand, Executive Director Fixed Income Division.
m
THE INVESTMENT BANKING ARM OF THE BARCLAYS GROUP
Trainee Analyst
Scandinavian Markets
/Continental European specialist
V-/ stockbroker requires Scandinavian
language speaking trainee analyst to
cover Scandinavian markets.
^ ve degree or equivalent
qualification in economics or business
studies (post-graduate qualifications an
advantage) and an understanding of
the workings * of Scandinavian capital
markets and institutions.
Write, enclosing CV, to
Mike Ketley
Gate House,
1 Farringdon Street,
London,
EC4M7LH.
FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
MERIDDEN
INTERNATIONAL
BANK UMTTED.
MerMan international BankLM.,te part of the ITM i nte rna tional Group of oompanteewhoeo
opersttonsareprtmarify located Inthe continent of Africa. The Bank has been set up biter
wato mobJfce financial resources for Africa-Jjased projects and due to the rapid expansion
of its activities In this and related flaws It Is now saeWns the foflowlng additional staff.
Vice President — Project Finance
TTris appointment fe based at the Bank's London Batson office. Candidates should be able to
demonstrate a capacity to mobffise resources from bUataral and muttnateral donor agendas
amt should possess extensive knowledge of International finance and the major financial
instruments. A willingness to work to Africa and an enH0fttened attitude towards the potttical-
Bconomfc environment In that continent will be expected.
Assistant Vice Presidents. ,
Preferably dttzans of an African country, these wffl be based hftfefr to Lusaka, Zambia at
the Bank's principal office but opportunities lor transfer to other branches to Africa may arise
thereafter. Appointees w to market the services of the Bank In the field of trade, capital
equipment end contractor finance, project development and -finance and deposit md
tovBslment management They will also be expected to cany out project feasibility studies.
AH the above positions can for experienced personnel holding relevant postgraduate
qualifications, with an abflOy to speak French or Portuguese as well as English. An attractive
remuneration package wffl be offered to the success candMates.
Please reply enclosing a M C.V. and the names of 3 referees to the Managing Director;
P. H. Recmtiment ijrtL, 16 Grosvenor Street; London WNX 9FB.
INTERNATIONAL
FUND MANAGEMENT
FIXED INTEREST
SUBSTANTIAL REMUNERATION - CITY
Sub«rta^aiUS1tnancMlrHrti«ution($50bnurKlermariac|QraenQhaaestabtatwdBrMae
London kvraetnwfit management company whoae funds are concentrated initiafly in
EurodoBar and muftf-curroncy fixed rawest security, with MdMtantW growth pnemed.
Reporting to the UK Managing Dbwctoc the poeUonwW often, in hie abeence, be
r— porratbte for the oompittiy^ln v s tm e nt a ff a ir e. A WghcaBbre person of sound
judga ™ ^n wbJBf^i^rw*tton. and with good management preflontatkan«idlnveetiTierit
CendhteaaawW be B^Ftoance; and/dra graduate In tnalha or a t a tt a U ca , computer
o ri entated, famttar with RC.prog »n itn i nfl and with quantitative techniques in
investment management. They wM be able to undertake risk analysis and performance
analyala far the funds under management^ They win have some years experience of
managing an International fbfed intereetportfotto.
Please write in confidence with futi earner and salary detalsto D MacJeod at JSI
B ela rH o n. 'W I la y ma rkat, London SW1Y4BP (01-930 9090>.
JSI Selection
WBajma rtwr,lnwrfnw SW1Y4BP.Wa|iho » » ai 01-839 4953. fax 01-839 4214.
International Appointments
THE COMMISSION OFTHE EUROPEAN COMMUNITIES
^Iino»T European strategic programme for Research and
/ DeveTopment in information Technology
HEAD OF DIVISION
(Software and advanced information processing
COM/R/A/34)
The Co l . _ _
iry pest which Involves
ESPRIT programme.
llty for one*tmrd of the total
mmwwis i imig
software development •.
High-level neootlatfna experience with both governments and industry and expe-
rience of staff managementare essential.
ADogcantS should:
D have a university degree In a relevant flrtdn have at least isyearspost-gradi^e
exoerienceln the areas stated above □ be nationals of one of trie EC Member States
□ possess a thorough knowledge of one community language and a working
imourteSw of a second. A very good knowledge of English Is essential fbr this post
□ be aged approximately 40-50 years.
contracts wW he form initial period of three years with possmmtfof renewaL
Employment wiu be In Brussels.
to aooivfor this post please send a detailed eumcuHim vitae {preferably In English)
giving details of professional ejmerlence arej level of responsibility. -
reference COM/R/A/34.
COMMISSION OFTIHEEliROPEANCOMMUNnTCS .
200 rue (iff la toi - J7Q - 5/14 - moo Brussels.
THECOMMISSIO«BME<mOPPOimjt^BiPlOYH
*
HIRAM WALKER-ALLIED VINTNERS INTERNATIONAL LIMITED
international area manager
AFRICA AND MIDDLE EAST -
m,.,. . vtanan Imcrn*tionaI Unrilod Is seeking to recruit an adgtional J totemTton al Area
p*>»* <* “<’«*•
Tbc prinnur r—*-**^** ** ,lka B— >etm * maaeacc* 611 * ti* 8 appobited datiabutioB. the Artai Managpr bang the
Bread Owner's represcgiintive it* bh market place.-
A WRh of end meiasafcl edkd tor together ^ d las* Usdu* hn&Ki
coupled 38 Ta P««i reTre*»:.*luu tlnwwtical appmdu ...
_ . -1 in omdldaRts both mate and flnxnfe. poncoaing a uuhwiftydegn* who axe in their
JJf Srectured sates aw* background and experience of thc relown markets.
a. ttu i will be baaed la Bmatete sod involves reteufc* travel In third wodd countries language
FriS wSd ba usefoL Applicants should bo prepared to-mand up to nine month* of die
year away from home. . ' ~ .........
Th« Iniumd in UBS Potion should _*ppiy in writbtt. ew*wag *-fcO CV ? id!- - -
|» I D EMa. PWoaaMt Eiwiiiire
Hlnga vyaBaasUffled Vtetnereln terea t ta ml LteaBwl .
UuioirSWiy SLR • _
• Tekfhoot a - 01 7W 8899 - ■ - - - ' L; :
FINANCIAL OPPORTUNITIES
SENIOR MANAGER
it* PF/4 43.
RESEARCHER
. Experienced specialist required Tor a quality boose in [be
German A. French Bond maifccis. Fluent speaking h both
-Goman ft Frenc h is essential- Please cafl Richard Ward.
AUSTRALIAN EQUITY SALES
Must have at least one yean experience in Australian Equity
sales with coverage of UK. OBcnuaL For further information
pteasc call Karen Gray.
FUTURES TRADER
Good experience required of trading all mstrumenu. Candidate
must have a good working background. Please call Richard
Ward.
SALES - EUROPEAN EQUITY SALES
To UK - fluent French. Experience with Equities sates, prefera-
bly European. Large international house. Please call quoting ref
Df/310.
EUROBOND SALES
Candidate most have two years experience in Eurobond sales
ideally with a good Sc a ndin a vian or UK diem base. Please call
Karen Gray fbr details.
FUTURES SALES
Good e sp aieutx in quire d in Institutional Saks of Futures.
Candidate must have a good working background and good
contacts. Please call Richard Ward.
SALES - FRENCH FRANC GOVERNMENT BONDS
Must have O-A/TVs sales e sp e i ie uce. Top parfcagr available.
Quote ref DF/6IQ.
MULTI CURRENCY EUROBOND S A LES
Good e xpet ici t cc needed in Deutschmark, Sicrtiim and Guilder
Eurobond sales. Please ring Karen Gray fbr further details.
AUSTRALIAN TRADER
Very good ex p erien ce req u ired in trading Australian Govern-
ment Bends, setm-GovernmeM Bonds etc. Phase call Richatd
Ward
CORPORATE FINANCE
Mi annum I years experience. Would suit graduate with at least
I Europ ean language. Ref Df/843.
CANADIAN DOLLAR EUROBOND SALES
Reputable house seeks ex p erie n ced Canadian Saks people with
mod European chest hue. For further information phase caQ
Karen Gray.
MANAGER - FIXED INCOME SALES XNEG
4 yean e x perience
GILT SALES £NEG
2 yean e xperien ce
TREASURY SALES £NEG
2 yean e x per i e n ce
CONVERTIBLE BOND SALES £NEG
2 years experience
EURO COMMERCIAL PAPER SALES XNEG
2 years experience
SYNDICATIONS SPECIALIST XNEG
Capital Markets experi ence
JAPAN ESE EQU ITY SALES XNEG
2 yean mm te nre
MANAGER - JAPANESE EQUITY SALES XNEG
Min 4 years e x perience
UK EQUITY SALES TO EUROPE XNEG
2 years experience
EUROPEAN EQUITY SALES TO UK XNEG
2 years experience
MANAGER - UK EQUITY SALES TO EUROPE XNEG
Min 4 years exp e rience
CANADIAN EQUITY SALES XNEG
2 yean experience
FIXED INCOME SALES XNEG
Scandinavia - 2 yean experience
FIXED INCOME SALES - UK XNEG
2 yuan experience
For flirther details of there vacandea please call Sue Stephen.
01 3776488
Cambridge Appointments
232 Shoreditch High Street. London El
=4 01-377 6488 1 =
policies
LIQUID ASSETS MANAGER
GLASGOW EXCELLENT NEGOTIABLE PACKAGE
Murray Johnstone Limited is one of Scotland's leaefing independent
investment management groups, currently managing assets of over £4,000 million.
Wb have a wide range of cHents including Investmenl Trusts, Unit Trusts, Pension
Funds, Venture Capital and Offshore Funds.
As part of our continued development and progressive nwiagement
approach to clients? requirements we have created a new rote of Liquid Assets
Manager, whose technical knowledge of monetary products will be used to assist
Investment Managers in formulating profitable policies for Bquid assets.
Based incur Glasgow offtoe, yotffl be expected to contribute to views
on currencies to which to place efients? Squid assets in older to achieve high
terete of interest.
Probably aged around 30, your experience (which may hare been spent
in an international bank. Insurance company or local government treaswy function)
wtfl have given you the abffity to manage large amounts of money
You wffl be expected to Ealse with Investment Managers and clerical
admHstrators so axceflent inter-personal skills are essential, as is the ability
to make decisions and takB the initiative in complex situations.
The rewards package is pitched at a level that wfll be attractive
to the highest cafibre inrSviduals.
Please write with fufl &v. to: Dave Blggart, Personnel Manage^
Munay Johnstone Limbed, 7 West rate Street, Glasgow G1 2PX.
MURRAY
Far Eastern
Stockbroker
based in London with strong
market presence requires stock
option market maker or trader
to complement its London
office. Candidate should have
knowledge of options strategies
and some knowledge of
fundamental and technical
analysis. Knowledge of Far
Eastern markets not essential,
though this is the field candidate
will be operating in.
Apply with full C.V.
Write Box A0977, financial Times,
10 Cannon Street, London EC4P 4BY
SWAPPERS
Looking for an
opportunity with a highly
successful international
consulting and
technology firm?
Send CV to Box A0973,
Financial Times,
10 Cannon Street,
London EC4P4BY
Personal
PUBLIC SPEAKING Training
writing by award winning a
lesson frao. 01 030 2137.
Clubs
EVE luta outnvod mo others Mam of a
poffey on *afr play and value (or roonoy.
Suppar from 104L30 am. □( »co anq top
TnusKtans, glamorous hooioooas, areWng
Doanhow*. IBS. Ragom SL. 01-734 0SS7.
APPOINTMENTS
ADVERTISING
International Appointments
ECONOMIST
Mozambique
DM* A* Pteaao ra TtetB (TcxiOa DfcwctnraX*)
State S e cr etaria l tor Food and Light Indimry.
Dories viahi&iy stndir*. cocr-bcncCi analyses, coordinating financial
a « ulBiM in p-J-M. plan, advice on c om puter uiilizaDoti.
AppSeam react have a degree In Borinm Adnrinhl ration of Ec onomics or crmlar
ana at teas 3 wars* relevant exp e rie nc e in indusoy enentlaL Experience with micro/
macro: w o n o mtc a. eorepaim, project evaluat ion , fin a nci al muionimn desirable.
ADMINKTHATOB/FEMANCIAL OFFICES
SwizQasd
TtaSehaai sT AgmcfaSs Farm Tactemloor . _
. requites an adrmma reinr/finaivial oOicer to ire lands, keep financial rec ords ,
prepare a c n ax mta . control stuck and pooRfe to teach basic accounting.
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EC4P4BY
FINANCIALT1MHS
MANAGEMENT
D resdner Bank, West
Germany's second
biggest financial
institution, with
total assets of DU 2Q7bn
(£64.Sbn), has a problem. Its
towering steal-dad headquar-
ters in Frankfort may be a few
metres teller than Deutsche
Bank’s twin towers, but when
it comes to publicity, its larger
>ora1
the headlines.
Dresdner Bank: beavering away at
building a reputation on the quiet
Nothing illustrates the dis-
parity better than the two
banks’ strategies towards the
European Community’s
planned free market in finan-
cial services from 1992 or there-
oboute. Deutsche Bank (total
assets DM 268bn) has been
using its bigger resources to
buy strategic stakes or out-
right control of banks through-
out Europe as part of a pfao to
be represented prominently in
all key EC markets by 1992.
By contrast, Dresdner Bank
has appeared to stand stQL Its'
inactivity has triggered criti-
cisms of a lack of vision, nego-
tiating 1 din, money, or a com-
bination of all three. Strong
rumours that it faded to pull
off a major bid in Italy have
fostered that impression.
Even Commerzbank, Ger-
many’s third biggest bank with
total assets of DM 1629m. has
won some praise for its defen-
sive strategy of cross share-
holdings with European part-
ner banks.
But the criticism heaped on
Dresdner Bank is not entirely
fair. Not emulating Deutsche
Bank’s ambitious expansion or
Commerzbank’s defensive
pacts does not mean it has
been slothful or unambitious.
The bank under its chief
executive Wolfgang Rdller has
identified securities trading
and fund management — two
areas where its strength is
acknowledged - as sectors to
push in its 1992 strategy. As a
fond manager, it already has
Just under DM GObn under -
on a par at least with Deutsche
Bank.
Haig Simonian contrasts the style of West Germany’s second largest financial group with that of its rivals
coherent presence in Europe
for the more competitive days
ahead?
Protecting its competitive
retail position in Germany,
where foreign banks will be
increasingly attracted after
1992 by the high standard of
living and savings rate, is the
watchword. In its wholesale
business the bank intends to
compe te aggre ssi vely to attract
funds from institutional inves-
tors around the world.
Dresdner Bank’s surprise
purchase of Thornton, in
which it now has an almost 73
per cent holding, is the first
step in its strategy. The acqui-
sition has given Dresdner two
new strengths a presence in
sterling funds and a strong
position in the Far East, where
Thornton has soecialised.
With some £950m under
management. Thornton, which
made about £3m after tax last
year, has quickly established
itself in the UK ftmri manage-
ment business, with some 15
listed fonds. The company was
heading for a £100m flotation
last autumn until its value
plunged after last October’s
crash.
Gaining control this year
cost Dresdner Just a quarter of
that. “With Thornton we
bought people too,” notes atm
member of the bank’s manag-
ing board. “Others wanted to
buy, but they were just inter-
ested in the funds under man-
agement."
Wolfgang Hotter (left) and Richard Thornton: Dr
as areas for expansion - buying T h om son a Co
wr Bank Men ti fted oocurtBea trading and fund manag wwrt
> a «tap along Oils rood
After buying Thornton & Co.
a privately-owned UK fund
manager, in May, it now plans
to expand its business further,
partly fay acquisition. On the
dealing it already ^ an
international securities net-,
work that is particularly
strong in the US and which is
arguably ahead of its German
rivals already.
But how do trading and fond
management fit together, and
bow does Dresdner Bank hope
to knit together its interna-
tional network, which now
a subs tantia l Stfijiing-
based presence in London, on
top of its established local cur-
rency activities in Germany
and New York to give it a
Apart from a sizeable Lon-
don Thornton about
80 people in Bong Kong. "It
has a fantastic reputation out
there," says the Dresdner
director, noting that its Far
East business is not Just based
on trading for European inves-
tors, but locals too.
Marriages between cautious
German banks and more-
swashb uckling Anglo-Saxon
operations have not always
been without friction. How--
ever, early signs are that the
Dreatner-Thomton 'nutrfi may
be better aligned than most. A
key factor here is the shared
emphasis on longer-term
gr o w th rather *h«i short-term
profits.
"It’s not a quick bock philos-
ophy," agrees one Dresdner
execut i ve, speaking of Thorn-
ton's. Moreover, by insisting
that existing management
keeps a minority stake and
asking Richard Thornton to
stay on for another four years,
it has sought to cement that
contin ui ty. "It's a good time-
frame to build this thing,” says
Thornton, who suggests that
further friendly takeovers of
UK ftmd managers are not to
be excluded.
ih gamting its US fund man-
agement presence is probably
Dresdner Bank’s next step. In
the past, it has been held back
by the Glass-SteagaU Ant,
which separates securities
broking and underwriting.
However, it now feds there
may be a in wind.
Dresdner has two US securi-
ties vehicles: ABD Securities
Corporation, an investment
hanking subsidiary, in which
Bayerische Hypoth eX eu-und
Wechsel Bank hag a minority
stake, and ABIE, a food-man-
agement business. Together,
they JMMg mn L for anme p Hhn
funds under manag ement
worldwide.
However, its gristing US
securities business is "grandfa-
thered" under US law. This
means that as a long-estab-
lished business its existing
activities are exempt from the
provisions of the dass-Steagall
Act but are prevented from
buying any farther going con-
cerns. Thus expansion in ftmd
management «»n only come
ttitoi-iwlly jf flip hank js tO
jeopardise its existing commer-
cial kanktiig activities.
ft now thinks matters may
be set to change, though, for
the may nave found an
acceptable way around the reg-
ulations. Much still depends on
discussions with the Federal
Reserve Board, but "it is possi-
ble something will come
through by the end of the
year," says one board member.
The bank is unwilling to
name specific bid targets, but
it has a variety of options in
mind, ranging from outright
purchases of US fond manag-
ers to closer cooperation with
big US institutional investors
like tire pension fonds. “With
1992 approaching, many US
parties are becoming more
interested in Europe ana would
like help with an entree," he
Significantly, contact with
US frartfattinrMii investors has
mmo through the broking side.
ABD already seats on fly*
Boston Stock Exchange. Its
boss, Theo Schmidt-Scheaber.
.was the first foreigner to be
made president of that bourse.
More recently, it has bought
five seats on the New York
Stock Exchange, considerably
h n pdc H rig tts US PT Yifflp- .
"ABD is now ahead , of all
other European banks in New
York when it comes to sales of
European securities to US pen-
sion funds," riirfma execu-
tive.
Local representation hes at
the heart of th e link between
selling secoritias manag-
ing funds. “If you talk to peo-
ple about and the perfor-
TECHNOLOGY
O
O ne of the corporate
goals of Gap Gemini
Sogeti (GGS), the
largest computer
software company in Europe,
is to be among the top three
software suppliers in every
European country.
ft has achieved that position
in most Continental countries,
but in Britain CGS lags for
behind its competitors.
Whether measured by turn-
over, £&5m in 1887, or by staff
only 150, the UK operations of
CGS takes drastic
action to break out
of a niche market
CGS are tiny compared with
the leading UK companies such
the leading UK companies such
as SD-Sdcon, Serna and Loglca.
Ihiring the 1980ft, CGS has
achieved an average annual
growth rate worldwide of
about 30 per cent, two-thirds
through internal growth and
one-third through acquisitions.
According to Serge Kampf, the
chairman and founder, the
French company aims to
expand at a similar pace for
the next
If it succeeds, the group’s
1996 tarnover will reach nearly
$8tm, though even so it will
have only 2 per cent of the
global data processing market,
or 5 per cent of the profes-
sional services market.
In the UK, CGS has
remained largely in a niche
market, supplying communica-
tions systems for the emer-
gency services - police, fire
amfl ambulance. So for the com-
pany has felled to expand its
British activities by buying an
gg teWtehfid UK software house,
despite a long search which
has in v olved unsuccessful dis-
cussions with more than 20
Clive Cookson examines the efforts of Europe’s
largest software company to catch up in the UK
takeover candidates.
In May the parent compa n y
took mere drastic action. Paul
Hofmann, vice president for
business development at Gap
Gemini Europe and the leading
corporate troubleshoo ter, was
sent in to run CGS (UK) for
about nine months and. in his
words, "to start a revolution."
Three months into the mis-
sion, he has drawn up d e ta il ed
plans for rapid internal expan-
sion, which would douhle the
size of the UK workforce to 309
by the of 1989 and take it
to 450 by the end of 1990, even
without an flccndstioxL
Bat Hofmann is looking for a
UK software company to buy
and if he succeeds the overall
growth could be very fast
indeed. "I would tike to go for a
company in the manufacturing
or finance area," he says, '"but
if I found a very good company
which specialised in another
field I would take it anyway."
A hostile fakl for a software
company would drive away
so Hofmann jaijrin that
any takeover must befrteufly
and flgnbr managers from
the company acquired should
Join GGS.
At present CGS has only two
UK offices, at Ylewsley near
Heathrow Airport and in Man-’
cheater. Hofmann’s internal
expa nsi o n plan will add six
new offices. By the end of 1989
there will be four regional
branches (Manchester, Bir-
mingham and probably Bristol-
and Newcastle) and four offices
covering market sectors: the
public sector (building an pres-
ent work for the emergency
services), fi na n c e , manufactur-
ing *th! prints fjrov
CGS is a strong player in the
market for financial an d manu-
facturing computer systems in
other countries, but in the UK
these businesses will have to
be built virtually from scratch.
Hofmann has already
appointed someone to head the
iwawri fi« r*nringr h iiah m ax,
b likely to focus first cm con-
tinuous industrial processes,
such as chemical plants. He is
about to select a leader for
CGS’s UK financial services
business; it wffl. conce n tr a t e on
banking systems If someone
with a banking background is
chosen, and on insurance if
someone from the insurance
industry gets the job.
Although there is a world-
wide shortage of professional
computing s ta ff TTnfmami does.
not think CGS will have too
much trouble recruiting 800
people over the next 18
m on t hs. "It’s easie r to get good
people in the UK than in Ger-
many or S witzerlan d." he says.
Even 60, for the next few
months be will rely on experts
brought over from CGS subsid-
iaries in other countries, par-
ticularly financial systems spe-
cialists from France and
laaiwifairfa irfa ijf specialists
West Germany and the Nether-
Wm
m
--
m M
V--'"
•.'SXi&Eii
wW 1
‘‘ m -i '
:u ••• \ T, : : f . -:- : T '
FINANCIAL TIMES WEDNESDAY AXTGUST24
DSGL its real estate fond.
Outriglft acqtifeiflan of other
continental European hanks or
fond managers is not port of
the strategy, although Thorn-
ton employees suggest further
UK friendly takeovers are "not
rated oof. Nor does Dresdner
have full-scale mergers or
smaller cross-holdings with
nthw Wmiijiiwn hgnfaffl
Rather, it is winking from
two hey assumptions. First
that the’ gradual abolition .at .
banters to Buropean financifil
services wJE make it. possible
to do more In European mar*
kets from its German base.
Second, that no one. single
approach, such as Deutsche
Bank’s acquisitions or Com-
mejsbank's cross-holdings, in
applicable throughout Europe.
Business
courses
bition October 19-28L g*-
SSLOOO. Details fooffl JJJJT
fere nee Manager
Fbium>,^n«sCrafcre^ :
FIE. 19 Tanghn Bond
TangflnKwpidngCtotr^Sing-
aporelOM. 2355232 «•
7349 385. Trie s Rs 400133 ATT.
Fax: 7379027. ' .
Manag ing strategic, alliances
- the European dunenMon,
London. September 19. Fee.
non-members £210; personal
members £180; corporate mem-
bers £260. AB fees snlriect to
mance is there, then ft leads to
talks about running part of
their money," one
executive.
Those c on t a ct s have already
started to bear fruit, with the
possibility of some $500m in
jumrirm fund mcmey ahnnt to
come Thornton's way, and may
frin gynn if flw hanfc succeeds
with its US plan later this year.
But in the meantime, Dresdner
is taking further steps to
im p rove its service to US insti-
tutions by setting up a 24-hour
trading capability in German
sec uriti es in Frankfort, allow-
ing US rife n tg to do business
OPtridB imimmf f>r mim hOUTS.
What of continental Europe?
Obviously, Germany is the
bank’s strongest ares. Some
DUBQbn total fan^g managed
are split between DIT and OBJ,
its two domestic fond manage-
ment subsidiaries, which
together account for about DM
30bn in assets. A further DM
lfibn Is handled by the bank’s
own trust deportment, while
some DM 4fan is i n verted in
Countries like the- Nether-
lands can best be staved from
Germany or Luxembourg,
where the bank is already wwl
placed in both institutional
and private client business, ft
has recently set up Dresdner
Bank Asset Management as -a
special offshoot ini Luxem-
bourg. By contrast, France,
fogy and Spain - the three
most attractive, markets for
German banks today - require
different approaches; it says.
- fa France,where acquisition
op port u nities are limited, the
bank intends to develop its
existing subsidiary, Banque
Veuve MorinrPons, based m
Lyons. The bank already has a
fftmiia nF frnids for i t s d omw ftir-
efientsand Dresdner now plans
to expand these and possibly
offer German investors a
French ftmd later. By con t rast,,
acquisition may be the right
approach in, Spain, where
many d omes tic financial insti-
tutions continue to need capi-
tal, making an outside
•approach more welcome,
Dresdner executives think.
Haly is mntlMg matter. Hav-
ing perhaps had its fingers
burned on an abortive bank
acquisition, cooperation with
other financial institutions
such as insurance companies
or pension funds is to be
Dresdner’s strategy.
For those mesmerised by
Deutsche Bank’s ambitions'
acquisitions, Dresdner Bank’s
approach may Took daft But
there must be many European
iwnk« occupying the number
two -or three slot in their
respective countries which
lacketther the resources or the
management inclination for
takeovers on a wide scale, even
if all the chances were there.
Examining and playing on
their strengths, as Dresdner
Bank is attempting, may be fire-
light answer for them too,
ahead of 1982, even if it does
nrf ^a y i i iwt a)i flifl headlines. •’
hers £260- All feesjeme^
VAT and payable to
Details from Christa Langan,
The Strategic Plannin g Soci-
ety, 15 Beteave Square, Lon-
don SWL Tel: 01-285 G346.
Man agin g information tecn-
nology opportunities, Lomwn-
September 19-28. Fee: £L60O-
Details from Louise Ashneld,
Registrar, information Tech-
nology Programme, London
Business School, Sussex Hac®.
Regent’s Perk, London NW1
4SA. Tel: OX-262 5050. ^
Strategic networks - howto
use communication networks
to gain competitive advantage,
: London. September 28-29,
March 9-10 1989. Fee; first dele-
gate £495; additional delegates
£445. All fees subject to VAT
anil payable in advance.
Details from The Network
Resource Centre, 2 The CMpel.
Royal Victoria Patriotic Build-
ing, Fitzhugh Grove, London
SW18 3SX. TekOl-871 2546;
Telex: 299180 MON1NT G; Fax.
871 3868.
The international Insurance
amt 1 zfsk management confer-
ence, Lisbon. October 24-26.
Fee: non-members BFr 74,000;
members (AMA/D BFr 66,600;
risk ’ managers BFr 62,000.
Details from The Customer
Service Department. Manage-
ment Centre Europe, Fostbus
95, NL-3417 ZH MoofibOEt, The
Netherlands. Tel: Belgium 32/2/
516J9.il; Fax 32/2/513.72.08;
Telex 21917 mce b. ■ '
The annual company report-
latest developments, London.
October 6. Fee; £205 + VAT.
Details from Nicky Hoberts,
Legal Studies and. Services,
Bath House; 56 Hblbom VS a-*
duct, London EC1A SEX. Tel:
01-236 4080; Telex: 888870.
Network architecture - the
multi-vendor environment,
London. September 26-27. Fee:
first delegate £495 + VAT;
additional delegates £445 + -
VAT. Details from The Net-
work Resource Centre, 2 The'
Chapel, Royal Victoria Patri-
otic BuOding, Wtflmgfa- Cmw,,-
London SW18 3SX. Teh 01-671
2546; Telex; 298180 MONINTG;
Fax: 871 3866. ’
New dawn for a
bright system
E ss^ss^s
technology which
a tte mp ts to mimic h uma n rea-
soning , seems se t for rapid
jpowth after years of fijfltng to
five up to its promise. - . .
According to Ovum* a Lon-
don-based consultancy whhfe
has been following the devefc
opfcncnt of toe expert s ystems
market since toe asdy 1990s,
growth rates in excess of 30
gmrcent a -year now seem
The period 1987-88 was terri-
ble for the. expert systems
bus i n ess , says Ovum In a
study* due out tote week. It
potato -out that in the US, file
sent In "to
lands.
Hoflnann, a 89-yearoid Ger-
man. speaks from experience
rather than youthful enthusi-
asm. He joined CGS in 1982
after spending 30 years, with
IBM. He hopes to band an Ins
UK revolution to a British
leader at the end of this year.
"We have three candi d ates for
managing director," he says,’
"bat tfaelistisnot c losed." ff
Bot DMtna succeeds in buying a
UK software company in the
mar future. its, chief exec uti v e
would be a 'leading- candidate
for the managing director’s
rote.
cmnpantss which once led the
indwtry hare run into losses
and cut back heavily on staff
In the UK, moat of the cam-
sy s te m s deveSojpnents^ltaYe
been losing money. “Financial
rescues in various toons have
been fits order of the day."
Expert systems use tech-
niques derived fr om artificial
the musfon that computers
can give reasoned a ns wers to .
questions. Their .potential as
"Besults havs Included dou-
bling toe jw w nwt pf business
g e nerated by sates calls and a
five times increase in the
recommendation of new busi-
ness by satisfied customers."
Security Pacific, In Calif-
ornia, developed a s ystem to
detect debit card fraud and
riateed to Java saved 8144000.
over one weekend. A- loan
advisory system developed at
Banqne Hervet In France has
reduced fits time' taken foe c a
loan d erigh w from 19 days to
1^2 hours;
The Ovum Study MettsW
two areas of toe market as
befog particularly promising:
• The market for software
packages to develop expert
systems on high powered
workstations and advanced
personal computers. Such
packages retail at between
gMMO and *10,000 a copy.
• Soft ware for developing
expert systems an mai nfram es
®p®ting upwards of
*100 ,000 ,
Ovum says the notion that
targe companies would be pre-
SSgiSi **$**5 ? * **
mtaqp ie copies of azz expert
system is false; so is the idea
! .» ™ systems corid be
Used Hhe s preadsheets or .weed-
.■ processors by ordinary office
workers.
'Oie industry is fragmented'
*“3 foc hs le adership. Ovum
says, printing out that hard-
ware sumHars like IBM, Digl-
tol Equipment and Siemens
have the resources and the
SS? while small
Spemaftst companies have the
f peunripgy. and consultancies
fire systems expertise
Its Bgro ris flat hardware
wa aga a lfs are best placed to
Jg^toWthw toe esseutiS
^ dnk ? 'tatwwn the hard-
ware vendors and specialist
wffl be a
MjlW l^qnipmettt vrtthJteE
fittenmtiunal
CogPWws with Expertech.
expert “advixers” or as icnosL
tories of expertise had
prompted hdrtness analysts to
predict the emergence of a
multi-mlllian-dollar business
by fire early 1990s.
Hie study shows that today
toe wurid market for expert
London’s black cabs hail the computer era
N ext time you need to nies are restricted in. toe nmn- ■ 1
order & taxi in a harry, ber of rJmnnete they are aBo- /
do not despair tednud- cated because of the high 'TftXf » *
N ext time you need to
order a taxi in a harry,
do not despa ir technol-
ogy is coining to the rescue.
Hundreds of Lo ndon's bl ack
cabs are being computerised,
which should result tn a
shorter wait for customers who
summon them by telephone
Dfal-A-Gab, a friendly society
in which each of the drivers
has & share, plans to have a
computer terminal in all 1,400
of its cate by the end erf Octo-
ber. The small display and key-
board will be used to send and
receive information over the
society’s radio network.
Computer Cab, which ri«hns
to be London's largest blaric
cab company with 2^00 cars, is
introducing a pilot scheme in
September involving 100 of its
taxis. Eventually all its fleet
will be equipped with radio-
linked terminals.
Like most of London’s
mobile radio naers, taxi compa-
nies are r e stric t ed in. toe num-
ber of channels they are allo-
cated because of the high
demand for radio spectrum m
the capital. By transmitting
the information digitally, DlaL
A-Cab and Computer Cab are
'planning to squeeze more mes-
sages down their existing chan-
nds, sod so to increase their
business.
The two companies have
chosen very different methods
of imple ment ing their com-
puter programmes.
Dial-A-Cab has bought a
zonal system developed by
Vancouver-based Mobile Data
International Zonal systems
rehr an the driver tapping in
t h e grid reference of the taxi so
♦h«t the control centre can
match cabs to jobs. In London,
the driver wffl tap in the dis-
trict post code. Th» sort of sys-
tem fa alread y In use In north
America and Europe.
It enables Dial ACab to elun-
JVFilCAu/
You ... j
fnate radio contact between
the taxi and the control centre;
the taxi’s location is keyed in
fay the driver and the informa-
tion about the next job Is sent
back by the control centre to
the cab, where it flashes up an
the display screen. The driver
can also fill in Information
such as the destination, fore
and job number, dispensing
with paper do******,
• Ken Burns, DJal-A-Cab chair-
man, says: "There are 18
systems like this working
round the world and it will
work successfully here.”
However, Computer Cab’s
managing director. Geoffrey-
Kaley, has rejected the idea of
a zonal system. "We didn’t like
the volume of unnecessary
updati n g. There fa a ratio offtl
for the number of times fife
driver Ires to update Ms loca-
tion to the number of jobs he
receives,* he argues. Kaley has
ratted' on Computer Cab's tech-
nical team to develop the ,
Admiral computer units
in-house.
Admiral Is the first phase of
Computer Cab’s rampaterisa-'
ties prqject The computer win
work with the taxi's 'existing'
-radio system and receive fife;
address of the next Job. ft wffl-
also replace toe paper docket
system^
The second phase, scheduled
for next year, wffl see bidding
for jobs digitised. Meanwhile,
the central control operators
will continue to read, them out
over the radio and the drivers'
wffl bid for than on .
their location.
The company plans to use
one of fi» existing vehicle locfr
tom systems, which keep track
of vehicles using radto
between, a tra nsmitt er in the'
vehicle and a series of radio-
beacon or aerial receivers. Tbs
location ttf avaflaWe cabs wtll
be fed back automatically to
the control centre.
Although' the total devetop-
foent cost of Com pu t er Cab's
s y s tem will be £2m.- tire com-
pany experts it to pay off hand-
somely. Because each digital
about $458m (£265m), stellar
to that for accounting software
packages.
Oven suggests that fire
overall market for software.
Kafay behaves be wffl be aUe
to add another 3^00 cabs to fife
networtBventtmlly-heifihop-
ingto.sril the. systen.to other
taxi companies.
Wal-A-Cab has . spent £2&n
on its compotes and fe-pkuK
ning to increase its taxi fleet to
at least 2^00 over toe next five
DeOa Bradshaw
grow fa the US from 2853m fa
1968 to S3£8tata 2992.lt esti-
mates. the -co r r esp o n ding, fig-,
ores for Bnrope at <35tot and
gLSbn.
B» reasons it gives for fids
hew growth are: a rapldly
tesrtnf wmnW of apphea-
tipns: more mature technol-
ogy, cither to. the needs of
mainstream data 'processing^
and a nuraisalisde mariEefing
focus on prodheta. with -
ko igto nn potential.
Ovum reports tftata imniber
of ptooeertug usera are show-
ing Identifiable rrtnrns. For
example, the John Hancock
Mutual Life insurance com-
pany of Boston, Massachu-
setts, developed a system to
nw«mwi ie n d snhalde'
advice packages for clients.
1
5^°“. Out could®
Cane
> I
! I:
**■■<*• ■“
v » <r/ \
■ M
* -
f
Sf’
FINANCIAL TIMES WEDNESDAY AUGUST 24,1988
11
Vs
1 or i
11
r.S
■
V rf
I’
S' '.if
^.7
r**'
TELEVISION
' Students’ snippets
/ t fat both fascinating
heartening to find, amid
tlw repeats and the for-
nmla-rldden soles which -
Kwm such a large part of the
summertime dross on televi-
sion, a series such as First
Rtm. Admittedly there are only
four episodes, and you hare to
live in London to be ab fc to see
them. Even that, however, is a
major advance, because they
consist entirely of short works
produced by students from
Britain's film and television
schools, and in the past the
only^ places to see each mate*
— J have been graduate screen-
ings and very occasional
festivals. -
These four programmes
(presented with astonishing
nervousness by ftim producer
David Puttnam who, despite
the obvious worthiness', of his
intentions, may well have
driven away some viewers
with the 2»mhte4fice monotone
in which he read the autocue)
confirmed what has been
argued in this mitrmw in the
past: that many of the peo ple
coming out of bur film schoo ls
combine a high degree of pro-
fessionalism with remarkable
creative originality.
The best of the nton works
being shown is, in my view,
Scmdmo Bambino, made by
Andrew Humphries of the
Royal College of Art. With
marvellous economy, good
editing; and a first-rate script
(too often a weakness in stu-
dent films) this tells the story
of -Martin, a desperately
well-meaning student with
Sandanistan sympathies,
whose dad runs off with his
girlfriend. It is fresh, sad and
funny and made me wonder for
the umpteenth time why, with
such talent bursting out of our
schools every year, we still end
up with such garbage packing
the summer schedules:
Humphries may he one of
the best, fcnt he is not alone.
Michael Barber's The Swim-
ming Pool is a superbly stylish
twistrin-the-tail tfcrfflw which,
in about four minutes, puts to
shame most of ITVs Tales Qf
The Unexpected. like Martha
Fiennes* Migrants it has a paw-,
erful sense of iricture-niakfcag:
of exactly what should be on
the screen, and where. R is a
quality common to the Italian
realists, the French nouvelle
vague, and much British televi-
sion drama of “the 60s,' Mncar^
when it seems to have become
wholly unfashionable, at feast
on television. **:*"
duce a series which looked
- quite as -cheap as Late Great
, Britons. These programmes,
which have been reconsidering
various historical re pu t a tions,
ending- last week with Oliver
Cromwell, were made by Brook
Productions and, presumably,
were supplied to the BBC as
part of the 2S per cent of inde-
pendently produced material
which the Government wants
included in BBC and ITV
schedules. There has been
nothing much wrong with the
historians involved or the facts
imparted, but the single-pre-
senter, single-set technique has
looked starkly economical, UXe
a post war Utility style
approach to television. Yet
nobody can blame the
BBC. . .can they?
David Puttnam: worthy
hot nervous role
7 have opposed
the habit of
reconstructing
violent and horrible
crimes m a manner
which can have no
bearing upon
their solutions *
When viewers express their
yearning for "a proper play
with a beginning, a middle and
an raid,” what they mean is
probably «™e*Mng very like
“The ITV Play" on Sunday:
Better Dags, by Robert Push.
This tale of a Welsh widower,
who saw his ambitious barris-
ter son in Ms true light only
after they started living in the
same house in a posh part of
Cardiff; was slqw, gentle, senti-
mental and melancholy, but
rather well acted.
In particular G3yn Houston
was perpetually watchahle as
the widower, Edgar. Such a
rformance makes
you wonder what happens to
actors such as Houston, who
began with Jack Warner and
Dirk Bogarde in The Blue
lamp and played what seemed
lfte an endless succession of
policemen and doctors in cin-
ema and television, but then
disappeared, from my view,
anyway, (bar decades.
American
The tricks used-by television tat
trying to induce us to watch by
pretending that we shall be
offered real
. rf nwna movies are
both ironic and disgraceful.
Ironic because the message so
clearly implied is "cinema is
superior to television:" dis-
graceful because of the dishon-
esty involv ed. O n Saturday
August IS, ITVs billings in
both TV Timer and the
national press included some-
thing called Drive bt Mode.
That phrase dearly s u ggests
a real film, since Americans do
not “drive in” to watch any-
thing else. Moreover, at the
head of the billing. TV Times
printed its “Film” logo, the
word being contained within,
sprocket fades, thus reinforc-
ing the message "This is real
cinema.* In fact the work on
show was a 15-yaapoZd Ameri-
can television' programme,
called Satan's ScftooI FOr Girls,
which is dismissed in "EaHt
well's Television Companion”
as a “lunatic farrago." Leslie
Halliwell was, for many years.
chief buyer of
material for ITV.
« • •
Shwa the. beginning of Crime-. .
watch 1 have opposed the nasty
habit of reconstructing for trie-
vision violent and horrible
crimes in a manner which can
have no bearing upon their
solutions and for which there
is no apparent reason other
than the buflding of Ug rat-
ings. The fear of crime which
pollsters discover nowadays,
particularly among the elderly,
appears to be out of all propor-
tion to the likelihood of an
farifvidual, getting Jmrt^akLR :
seems possible that this fear la
increawd. if not instigated, far
more hy. such. factual perils.,
such as Crimewateh than by
fantasies such as The
Equalizer.
But perhaps Crmetaitch File
(BBCl, Wednesdays) could be a
solution. Last week's pro-
gramme, The Railway Mur-
ders.” did not aim at getting
the public to help solve a
crime. It was, rather, a recon-
struction of a case - tan
John Duffy, who had raped;
murdered . three women —
which had. for a long time,,
been sub judice. There have
been many crime reconstruc-
tion series, those of Edgar
Lustgaiten to the present day,
ami this was a more than usu-
ally competent example. The
thing fo do, surely, is to sepa-
rate such reconstruction from
tin Tbfice 37* notion of getting
the; viewer to help the police,
fo that those who enjoy watch*
ing, crime reconstructions can'
do so, and those: Who want to
help the police without any
such reconstructions can also
do act. . -
There is a bizarre touch of
genius about the television
commercials for a beer called
Miller Lite. The first to claim
my attention began with an
all-grey shot over the nhenidgr
of a pigeon mid the words
“Bow, bow. bow” (1 think), fol-
lowed by the message deliv-
ered^ byj* number of young
men: “To all you out there,
with your heavy lives and your
heavy beers. . and ended
with the punch line: “Miller
Lite: it atari heavy."
r f "The new commercial
" a opens with tiie pop -
Jr song The Road Is
-M. Long " which starts
on'a moaning h armon ic a and
moves to a vocal about a road
“with many a winding turn.” A
young man with a prize-
fighter's face and a Mg smite
picks up a little old lady and
carries her across the road;
joi ns in a Ba m* of basketball:
marches into a pub, throws Ms
hat on the bar, and gets served
ahead of all the other thirsty
customers. The punch-line of
the song and the commercial is
“He ain’t heavy, he’s my
brother.”
1 suspect that this advertise-
ment comprehensively breaks
the spirit of the roles govern-
ing alcohol promotion, with its
references to strength and
Spurt, but technically it is a
superb of fflm Tan king- In
‘ * *' ( four Joca-
It is difficult to behove that the
BBC itself would dare to pro-
60 seconds R uses
titons, three mixes and 18 cuts,
yet it fads wholly relaxed. The
story line is unpredictable but
immensely strong; and it has
that rare quality: “repeatabil-
ity.” Dow it seQ beer? Who
knows - 1 for one have never
tasted Milter Lite.
Christopher Dunkley
Music in the Usher Hall
EDINBURGH FESTIVAL
Apparently undiscouraged by
an almost empty Upper (facte
- where have all the students
gone? does the Festival’s pric-
ing-policy need readjustments
- the USSR State Orchestra
and the Swedish Radio Sym-
phony have been doing their
best in the Usher Hall, and
were warmly received. The
stamp of Yevgeny Svetlanov
on the Soviet orchestra is-,
plain, for he has been conduct-
ing them for some 23 years;
young Esa-Pekka Salonen, is a
more recent recruit to the
Swedish forces, though he
seems to have tbVm in fiend.
1 heard Svetlanov’s third
Festival concert, which like the
other two was devoted exclu-
sively to Russian music. Pre-
sumably the flashy little
encore-pieces at the end
showed off the orchestra’s
proudest virtues: tight ensem-
ble-playing by the separate
instrumental groups, gleaming
attack, roof-raising volume.
Nothing more was needed for
Svetianov’8 own piece in the
announced programme, a
Rhapsody called “For his Six-
teenth Birthday.” One first
supposed it to be a tribute to a
son or nephew, but on the
musical evidence (naively
exotic in the popular Russian
vein) it seemed more likely to
be a work of the composer’s
own sixteenth year.
Those qnaint exercises
seemed to confirm what the
performances of Chaikovsky's
fantasy “The Tempest” and
Skryabin's Second Symphony
suggested: that the USSR State
Orchestra is something like a
brilliantly
band of distinct.
sections - strings for passion-
ate articulation (strictly regi-
mented), woodwinds for evoca-
tive colour, brass for
aggressive thrills. The trum-
pets and trombones always
retained a strident edge, obvi-
ously deliberate, and found it
hard to melt into the back-
ground when accompanying.
In music scored just in that
way the orchestra dazzles; with
subtler scoring it can sound
inflexibly bright.
That was often the effect In
their well-practised Skryabin.
The composer’s piano music of
the same period trades upon
far F gfitPT- touches and more
chiaroscuro than we heard
here, and we were more often
aware of one orchestral section
after another being wheeled
into action *fian of a continu-
ous symphonic texture. The
obbligato bird-song effects in
the central Andante were so
crisp and emphatic that the
real music slipped by almost
unremarked. Chaikovsky’s
“Tempest” fell into discrete,
vivid sections too, seeming less
of a coherent whole than it can
do. Nonetheless, the Russian
players’ Caching * rmnmnnfi of
their native idiom offered
rewards not easily matched by
anybody else.
Salonen and the Swedish
Radio Symphony offered
Schoenberg’s Expressionist
monodrama Brwartung, with
the soprano Karan
and Stravinsky’s Bite
Spring. For all Salonen's :
with vivid sounds, Bruxtrtung
was a remarkably mild offwi* 1
- mostly quite lucid, but also
quite tame.
A proper hell-for-leather
attack was saved for the Rite.
Though Salonen dwelt lovingly
upon a few slow passages,
often setting their elements in
intriguing and unfamiliar
relief, sound and fury domi-
nated. There was plenty of
expert playing, but the full
effect of relentless ritual needs
much steadier building and
firmer holding-back than Salo-
nen managed. Almost every
violent section accelerated as it
proceeded, losing tension even
as the bombardment grew. The
“Dance of the Earth” at the
close of the first Tableau left
no room for anything in the
second part to top it a clear
case of ejaculatio praecox, I
thought.
David Murray
AMffrtrMufr
Sara Kestehnan and Lorcan Crauitch in Bussy d’Ambois by George Chapman,
which opened at London’s Old Vic last night
Glass in a new light
ha one of London’s biggest
record stores, discs of FmUp
Glass’s music nestle an the
racks of “New Age” artistes,
alongside the likes of Harold
Budd and Robert Fripp. He has
triumphantly escaped from the
ghetto of the avant garde, and
has done so by attracting a
new public from the fringes of
the rode world.
His recent work is an artful
combination of chic cultural
alhisians — in *fife cross-over
age it’s pr e tty smart to build
an opera around Einstein,
G handi, or a hermaphrodite
monotheist Pharaoh, even bet-
ter to adapt a piece of Doris
Lessing sci-fi, underpinning it
with easily assimilable music.
To generations that take the
albums of Talking Heads or
BrlanEnb in their stride. Glass
presents no problems.
. But then neither would
recent Stockhausen, though
one could argue that the Amer-
ican’s dramatic instincts are
rather more convincing than
the West German’s; Glass's
unique and sHTi burgeoning
popularity, and Ms knack of
bridging two often disjunct
musical worlds, needs explain-
ing. Opera on the Beach is
described as “Philip Glass on
Ms New World of Music Thea-
tre," and promises that expla-
nation. R doesn’t deliver that
promise, but it is an easy,
informative read, lucidly put
together and edited by the New
York Times critic, Robert T.
Jones.
There is a concise piece of
autobiography to begin,
sketching in. Glass's early life,
his studies in Paris with Nadia
Boulanger, Ms first forays into
fringe theatre in New York and
the early minimalist scores,
before the genesis of the three
operas that made him the hot-
test pr o p erty in contemporary
music theatre is detailed. The
tone is remarkably free of mal-
ice: along the way Glass must
have encountered considerable
hostility and made not a few
gnemipg yet there are no did
semes to be settled in print
Opera on the Beach reprints
the librettos of Einstein on the
Beach, Satayagraha and Akhn-
’aten, and gives the s alient fea-
tures of the musical organisa-
tion of each of than. Robert
Wilson’s part in the creation of
Einstein is thoroughly
acknowledged - it is just as
much “his” work as Glass's —
but in the later works the col-
laborators have become pro-
gressively less important.
Glass is evidently a fast
learner, and in that, one sus-
pects, lies part of the secret of
OPERA ON THE
BEACH
By Philip Glass. Edited
by Robert T. Jones
Faber. £17 JO
Ms success. His preparatory
work for both Satayagraha and'
Akhnaten appears to have been
impressively thorough: he
immersed in the li fe of
■Gandhi and the history of
Ancient Egypt to such extents
that the composition of the
music almost became a subsidy
iary consideration. Glass’s
operas, one realises, are cun-
ning cultural packages,
adroitly assembled, in which
the music is but one element
- a Wagnerian Gesamtkun-
stwerk for the Global Village.
Why then does his work, evi-
dently so thoroughly profes-
sional, arouse such hostility in
some quarters? In one sense
the problem is not Glass’s fault
but lies with the ways in which
the music industry, from opera
houses to record companies,
will always take the line of
least resistance and maximum
profit. An opera house that
commissions a Glass opera will
guarantee itself good audi-
ences, and be able to pat itself
on the back for supporting con-
temporary opera; it would
almost certainly recoil in hor-
ror from the suggestion that
instead it commissions, say.
Nano or Garter. In such a way
the Glass idiom becomes tire
norm for contemporary opera
- accessibility is everything,
and those who have bewailed
the crisis of modernism for
most of this century can see
their alienation vin d icated.
In this respect Jones’s intro-
duction to Opera on the Beach
is revealing: he admits to a
thorough dislike of most con-
temporary ' music and is wor-
ried by the apparent gap
between it and the audience.
Glass and his minimalist con-
temporaries, Haley and Reach,
offered him a personal way
back - “Perhaps in simplicity
was an escape from complex-
ity. . . No one composer
invented this new music. It
was an eruption of the times,
an inevitability.”
The recent success of John
Adams’s Nixon in China shows
that the triumph of the bland
is not confined to Glass, and
that the public far this music
is large. But it is a different
public from the one which sup-
ports the standard operatic
repertory, though that matters
not at all to the opera-house
managements, which can see
their houses regularly filled.
The gap fa still there: Glass has
not converted the non-believ-
ers, but filled a vacuum, tem-
porarily at least, while the
mainstream of contemporary
composers who want to write
operas are starved of support.
Andrew Clements
Travciiinii <>n
Business in Italy?
Enjoy reading y our cotnplimentary
copy of - the Financial Times when
you’re staying. • •
. „ . in Milano at the
Diana Majestic, Duca efi Milano, Hotel
Exccllsior Gallia, Hilton Hotel, Hotel
Mtebriaa^do* Hotel Palace, . Hotel
Principe diSavoia .
ARTS GUIDE
August 19-25
THEATRE
Too Clover By Buff (Old Vic).
A flntng Gogolian production
by Richard Jones of Ostrovsky's
Dbny of a Scoundrel in an old
Rodney Addend version, with
A m sterd a m, S tadrt s d>ouwbu rg.
The Bn gHitk^iaiiMng Theatre
bf Amsterdam in Agnes of God
by John Ptrimeter. directed by
Biyce Pederson foot Son ar
Mon). (24 23 II).
card faooktugi aH 1821).
_ Virtue (GarrickX Transfer
of King’s Head revival of early
INoel Coward, seme period bat
leeaar vintage than Hay Fever,
but worth Bating. (339 6107).
SoufaTadfie CPtinoe of Walad).
Average, traditional revival of
the greet Rodgmand Hammer-
stein rnnticai, with Gemma Gra-
ven fatting to wash the barttonal
Biwlla Hah-
(8305809).
The Wwnt oM of the Opera (Her -
Majesty**), Spectacular, emotfoa-
ally eh»niy^»| P* f wi Ma fa-el
■by.
cards 379 61&V2eO
2244.*
7200).
Femes CShaftetimzy). Bartha
KJtt ana WUcent Martin now
decorate Mike Ockreot’s strong
revival of Sondheim's 1971 musi-
cal. in which pb&oned marriages
nearly tmtamtoe an old bun
league renhlra to adeemed thee ■
tre. (879 S38fi). .
Bapgood (AldwychX New Tom
Naur York
Cats (Whiter Garden). Still a
sett-out. Trevor Nunn’s produc-
tion Qf TJS. Eliot’s children’s
poetry set to music Is visually
startling and cbcreogrephlcaHy
feline. (239 6283).
A Chorus line (Sbnbert). The
Imgesbnumlng musical in the
US has not only s upporte d
Joseph Popp's Public Theater
for eight years but alao updated
the musical genre with its back-
stage story in wUch the songs
are used as auditions wstw thwi
wtmiHwmi. (239 6200 ).
Ice MMarides (Broadway). The
magnlfUamt spectacle of Victor
Hugo's majestic sweep of history
and pathos brings to Broadway
)l>wnn« In pn yptr y otrf HnamllL
(2396200).
Starlight BxgfW (Gershwin).
Those who saw the original at
the Victoria in London wQl
bandy recognise its PS incarna-
tion: the skaters do not have
to go round the whole theatre
but do get good enwrim an the
sppumteip stags with now
bridges and American scenery
r »«*r frnm h x- l fr u y wt
pop rnnrir and trumped-up, dBy
plot. (588 6510).
Mb and My Girl (Marquis). Even
if the plot turns aa framcniixz)-
iaytfpygmafiaa, fids Is no clas-
sic, with forgettable songs and
dated taadexmes* in a stags fnB
of characters. It has nevertheless
proved to be a durable Broadway
hit. (947 0033).
M. Butterfly (Eugene O’Neill).
The surprise Tony winner for
1968 Is a somewhat pretentious
and obvious meditation on the
true story of the French diplomat
whose long-time mistress was
a mate Chinese spy. (246 0220).
Speed-the-Plow (Royals). David
M»maf applies fifa WHnj
and ear for the exaggerations
of American language to Holly-
wood, in this screamingly ftmny
and well-plotted expose of the
film Industry. (239 6200).
Stranger Here Myself (PubUe).
AwgnHwi Bro w p H iftw u HB two
decades of Kurt Weill’s i
in a one-woman show <
the composer's careers in !
Parts and New York. (096-7100).
Tm Ml dl raH w flfwiiwlg dtt nl^ r
Opera House). The touring com-
pany of the international hit of
last season brings to Washington
the historical sweep of Victor
Hugo, to iwude anrf an In ate .
tent cont e mporary beat. Ends
Oct 15.(264 8770).
Sleuth (Eisenhower). Stacy
Reach and Maxwell Caulfield
star in the mystery pitting a
writer against a mild-mannered
travel agent who’s stolen his
wife’s affections. (254 3679).
Tokyo
Ittktgi Nob (Sensed! Asakusa
v«nnnn Temple). Japan's ancient
|>nd i^f nfrwte th witriral flyf ftip n
takes to the open air to summer,
with special performances by
torchlight in temple compounds
that always attract large crowds.
A Nab play and a inter,
hide (kyogeiO form the pro
gramme for tMs perfarmace by
the Kflnze Noh School at Tokyo’s
most famous temple. Thursday
only. (842 5311).
The National Theater iff the Deaf
(USA) with the Japan Theatre
for the Deaf (Sunshine Theatre,
Ihebnkero). Worth seeing even
by people who can hear. Ends
August 28.(987 4369).
The Sound of Music (NHK Hall). *
Touring production fin English)
of the ever-popular and oh-so-san-
thnental Rodgers and Hammer-
stein musical with Pat Boone's
daughter, Debbie, as *fi» singing
Marla van Trapp. Ends August
31.(237 9000).
Idamante CNakano Sun Plaza).
Spectacular but bland Japanese '
musical based on Mozart’s Ido-
meneo and starring pop idol
Masahiko Kondo (Machi). The
production is by kabuki show-
man Ichikawa Ennosnke, aided
by the design team that made
his Super Kabuki production,
Yamato Takeru, such a success.
Ends August 24. (379 2609).
Opera- za no Katjtn. better known
as The Phantom erf the Opera
(Nissei Theatre). Japan's leading
musical company, Shiki. acquits
itself well to what is a virtual
carbon copy of the London origi-
nal. The Japanese translation
is often awkward, but Andrew
Lloyd-Webber’s gift for musical
pastiche, Harold Prince's roman-
tically evocative staging and
Maria Bjomson's stunning sets
and costumes make for an enjoy-
able evening. (503 3111).
Lm Mis&ubles (Imperial Thea-
tre). This ftU wiiw musical adap-
tation of Victor Hugo's novel
of the Paris barricades has
returned to Tokyo fo r ano ther
four-month run. 7777).
\
Britten and Schubert
ELIZABETH HALL
The Sooth Bank mini-festival
of Schubert and Britten turned,
up an oddly divided concert on
Monday. Considered in a rumi-
native sort of way, Wmterreise
and Britten’s last string quar-
tet might seem to pair well (a
natural programme for the
recent “Endgame” series); but
the Endelllon Quartet were
determinedly ruminative, like
the pianist Markus Hinterh&u-
ser in the Schubert cycle,
whereas the young baritone
Andreas Schmidt was a model
Of gDOd taste
literalness. No suggestive com-
parisons were prompted.
In the long-studied EndeDion
reading Britten's op. 94 seems
wilfully private music, laden
with significations which out-
siders can only guess at. The
spare string-writing is exqui-
site, but refuses to expand: its
nodes are silent suspensions
and small, spidery turning s —
not the stuff of overt drama,
nor readily accessible to any-
one unfamiliar with the Brit-
ten oeuvre that went before it
For initiates, this performance
offered continual unemphatic
subtleties; it is an open ques-
tion whether a bolder silhou-
ette for the work would incur
real losses.
Schmidt’s well-instructed
appreciation of the great Win-
terreise cycle (be is a Fischer-
Dieskau pupil) was not
unsubtle, but it was terribly,
bland. In general his tempi and
phrasing were irreproachable;
and yet no salient change of
thought or heart within a sin-
gle song was registered in his
tone or Ms vocal gait His rare
efforts - as in the unavoidable
wrenches of “Hast," or his
placid cries of “Mein Here!" -
sounded like surface histrion-
ics. A sense at development
was sorely mistral His li g ht ,
attra c tive timbre was secure in
middle-range music, thinly
stretched in the lower reaches
and in quick passages, brittle
at the top. He has still to learn
how to use consonants to
e xpr es sive effect
Hinterhfiuser was a vital
partner to Brigitte Fassbaender
in her searing account of Win-
terreise last year at Hohenems.
This time he was careful not to
loom over Schmidt’s lyrically
innocent version, but again
and again it was he who
exposed - with unassertive
tact - the crucial turning-
points that the singer left unre-
marked. 1 was not persuaded
that justice can be done to the
cycle by making ft an exercise
in graceful vocal utterance
with all the deeper intimations
entrusted to the piano.
David Murray
Royal Philharmonic
ALBERT HALL, RADIO 3
The poetry of Byron, or at least
its various musical treatments,
was an obvious thematic
thread to be woven into the
present literary Proms in the
poet's bicentenary year. The
season is not including the
whole of the most ambitious
score bufit around Ms work,
Schumann’s incidental music
to Manfred, but Berlioz’s Har-
old in Italy has been per-
formed, and the main work In
the Royal Philharmonic
Orchestra's programme was
Chaikovsky’s Manfred Sym-
phony.
Vladimir Ashkenazy con-
ducted the work with the same
orchestra last season, and to
tyiat impressive account he has
added father d ramatic tough-
ness, particularly in the outer
movements. The RPO’s com-
mand of the score continues to
the scherzo,
sky at Ms most pictur-
still seems loss delicate
work coheres, with or without
knowledge of its programme
Manfred had been prefaced
-with Richard Strauss, rich-
toned, muscular Strauss, in
which fell-blooded emotion and
saturated textures were the
distinguishing marks. Neither
of the works - the Dance of
the Seven Veils from Salome
and Metamorphosen - is con-
ventionally conceived in that
way, and the passion of the
Dance, romantic, Rosenkava-
lier-hke warmth rather than
nervy, expressionist sensuality,
did not totally convince. But
such an open-hearted Metamor-
phosen, in which every contra-
puntal line was folly freighted
with intensity and each rhyth-
mic profile etched wife fierce
clarity, was absolutely compel-
ling.
and more prosaic than it
might, as if Ashkenazay mis-
trusts music of such simple
delicacy in such a rigorous
symphonic context. Even the
In both Strauss works, as in
the symphony, the RPO played
with a distinctive pungency; if
episodes of the finale pro-
ceeded with an inevitability
that escapes less comprehen-
sive performances and seemed
bom of a conviction that the
Ashkenazy's tenure as the
orchestra’s music director
brings about a genuine change
in its character ~ away from
refined detachment and
towards unbuttoned commit-
ment - its position in London
will become quite noteworthy.
Andrew Clements
Edinburgh Fringe
Hull Truck have come to the
Edinburgh Fringe mob heavy
this year with five productions,
two of them world premieres.
They eased themselves in with
September in the Rain, written
for the company by John God-
ber when he arrived as artistic
director in 1984.
t is a sentimental two-hander
about a Yorkshire couple’s 40-
year love affair with Blackpool
which gives sentiment a good
name. OK, so you can virtually
make up the dialogue for your-
self as Andrina Carroll rhapso-
dises about the sea air as the
couple arrive for their holiday.
From then on all the seaside
postcard topics, from the idlo-
syncracies of landladies to
undressing on the beach, get
their airing, but it is done with
gentle
such gentle niceness that if a
couple quite so uncomplicated
as Jack and Liz could never
exist, it’s the world's loss.
He is a miner, silent and
unemotional, but quick to
anger; she a twitterer. and a
bit of a goer. What gives the
play its power is the sudden
storms that rise between them
and also the under-playing of
>ics - what happened to
; just how sick is
Jack?
There Is a perfunctory
attempt at time-passing, with
Andrew Dunn never quite sug-
gesting that he was ever young
while Andrina Carroll fails to
age. But this is all about mood,
and as a humorous, symj
th fttic vision of the
sores of the poor it could
hardly stand more subtle treat-
ment Direction is by Neil Sis-
sons and it will fill the ball-
room at the Assembly Rooms.
In the same venue try and
catch Victor and Barry Say
Goodbye. These Brylcreemed
foals ran the Kelvinside Oper-
atic -Society with, well, not
exactly an iron hand. Nor a
totally limp wrist The attrac-
tion Of the spoof is that the
rampweftft Js kept g enteely at
bay, just No-one questioned
whether the Western Brothers
ehareri the game bathr oom cab-
inet and there are enough
merry quips in this musical
reverie of life on the right side
of the Glasgow tracks to keep
Aunt Maggie happy.
It is hard to be mordantly
witty at 11 in the morning. I
doubt if
even Dorothy Parker
managed it So warm applause
for Susanne Rock, who has
built a one-woman show out of
the life, both factual and fio-
Mnnal of th e Manhattan flrrin.
per. It naturally stresses the
wreck beneath the bons mots,
and is hardly one big laugh. An
Audience with Dorothy Parker
Is at the Playhouse Studio.
A speech impediment down the
line confused the name of the
promising Australian jazz
singer at the Assembly Rooms
on thfa page yesterday. She is
Sate
Antony Tborncroft
FINANCIAL TIMES WEDNESDAY AUGUST24
FINANCIAL TIMES Nick Garnett on international pressures for mergers in engineering
BRACKEN HOUSE, CANNON ST BBs T , LONDON EC4 P4BY
Telegram* Flnanfiino, London PSA Telex: 8954871
Telephone: 01-248 8000
Wednesday August 24 1988
The curse of
specialisation
The relentless drive for size
MR KENNETH Baker, the UK
Education Secretary, claims to
recognise the case for a
broader curriculum. Yet his
deeds rarely seem to match his
words. Earlier this year, follow-
ing pressure from Downing
Street, be poured cold water on
the Higginson report on A lev-
els. Professor Higginson and
his colleagues had argued that
16-18 year olds ought to study
five subjects rathe? thaw the
two or three customary today.
This would have brought the
OK more into lina with prac-
tice abroad, made sixth for-
mers mote useful to employers
and increased the range of
their own cultural and scien-
tific interests.
It now appears that the Gov-
ernment's commitment to a
broad curriculum is weakening
even at the General Certificate
of Secondary Education stage.
Early specialisation can be
avoided only if all pupils spend
a reasonable time studying
each of the main subject areas.
Last week. Professor Jeff
Thompson, the chairman of the
science working party, argued
that an pupils should follow a
foil science programme at sec-
ondary school leading to a dou-
ble c er t ifi cate warninatinn at
GCSE. This would provide a
basis for a higher level study of
science in fixe sixth form and
beyond - and not Just those
who intend to become scien-
tists or engineers as adults.
expect aU pupils to spend as
much as 20 per cent of their
time an science in years four
and five, leading to a double
GCSE certificate." He has
therefore asked the experts to
come up with a balanced sci-
ence programme which can be’
coveted in 12% per cent of cur-
riculum time, leading to a sto-
gie GCSE certificate.
Heavy demands
The science programme out-
lined by the working party
looks stimulating and innova-
tive. But because it involves
the integrated study of biology,
chemistry and physics, it
would make heavy curriculum
demands. For 15 and 16 year
olds, up to 20 per cent of the
overall -school timetable might
be absorbed by science. Profes-
sor Thompson concedes that
the time allocation could be
less in the final years, bnt only
if more time was devoted to
science at an earlier stage.
The working party's esti-
mates of the timetable
demands of science look rea-
sonable. Bnt they are .encoun-
tering vigorous- opposition at
the Department of Education..
Mr Kenneth Baker, file Educa-
tion Secretary, in a formal
comment last week said that
the department doubted
"whether it is realistic to
; Bigger retreat
! This is a bigger retreat than
it might appear. It will be hard
■ enough to condense biology,
chemistry and physics into a
‘ double GCSE, given that they
are today regarded as three
separate subjects. The notion
that a worthwhile science edu-
cation can be provided through
the taking of one GCSE is
laughable. Mr Baker fak
officials are demanding file
nwlntottTKia of an nnftatlwftfft .
tory status quo: in the past stu-
dents intending to specialise in
arts subjects have tended to
take only a token science O
level.
If the Government's commit-
IfiPTlt tO A brown ^ I rrWTilllfi is
to mean anything, it must
attack the notion that 13 or 14 i
year olds are ready to decide ;
an their fixture careers. IT chil-
dren of this age are allowed to
opt for a stogie science GCSE,
they win effectively be opting
not to become scientists or
engineers. Yet they are for too
young to make such a derision.
Mr Riiltpr OUgfat to w u m r a flurf
all children take at least a dou-
We GCSE in science and accept
the timetable requirements
indicated by the working
party.
The allocation of up to a fifth
of the timetable to science
would not constitute a down-
grading of arts subjects. It
would merely represent an
honest admission of what is
necessary if all children are to-
got a balanced education. Ide-
ally, such a balance would be
sustained at the sixth form
stage. The present practice of
encouraging teenagers to study
only two or three subjects dur-
ing their final years has cre-
ated an absurd schism in soci-
ety: the numerate are barely
literate and vice versa, ff the
Government fails to tackle the
pressing problem of early spe-
cialisation, it will have foiled
to reform the educational sys-
tem. It is time C. P. Snow's
"two cultures'* were merged.
I f there was one phrase
that outlived its relevance
almost before it left tbs
mouths of those who used
it, "small is beaaOftzr must be
it As a catefaphrase signalling
the demise of the corporate
giant and the rise of the lit fie
man, it was fixe most hack *
rayed line in the business fife
of the early 1980s.
The past few years have ren-
dered the term meaningless as
the biggest companies In a raft
of industries from food and
drink maimftrtaxring to domes-
tic appliances gobbled up or
elbowed out smaller and
weaker compet it ors.
Now a cratch of ownership
changes in one of fixe last sig-
nificant bastions of corporate
fragmentation, heavy and
medium engineering, is finally
wmelgnfap the gTnn U IS bGSStt-
fill tag to the rubbish bin.
During the past lew weeks
alone, big acquisitions in eleva-
tor manufacturing, pumps,
power station equipment and
minting machinery have tilted
market power towards the big-
ger and tougher company - a
trend gathering pace over the
; past three years. The same
thny h^Q hfr«m happening in
construction machinery, food
making equipment, paper mak-
ing machinery to areas of
the factory automation and
materials imwdWnp industry.
in BBgiwwrhig , clever tide
znanufectnrera wiB always sur-
vive. But the best of the bigger
companies are becoming larger
through acquisitions and joint
ventures. They are seeking
control of more markets ana
broadening core product
ranges in order to oner cus-
tomers services and
systems.
One trend is a thrust by
European companies into
North America. Within the
past month alone, Schindler,
the world's second largest lift
irmirpT - twa acquired tfw» tJS ele-
vator interests of Westtugh-
ouse. Another Swiss company.
Suiter, Europe’s second largest
pump company has bought
Big International deals
in 1988
fOmory
Komatsu (Japan). Dresser (US) merge US machinery interests:
WestinQhousQ (US). AEG (W.Germany) joint venture fri rafl equipment
March |
Wastinghouso, Siemens <ytGoemany)&nt venture in fectoy equipment J
PtotitefUK). Detroit Diesel QJS) joint venture in US In engines.
Asea-Brown Boveri (Swltz / Sweden) Westinghousojok* ventures in US
power supply equipment
MAN (W.Germany) buys Alsfrom (France) dtesel interests.
John Deere (US). Hiachi (Japan) Joint venture in excavators.
Asea-Brown fimr/Joint venture wHft ki turbines.
Hsd&efowger (W.Getmany) buys Haf7feG^p#ifcs(US)priritfng machinery.
Scfurxfi&r(Swttz)buys Wosttnghousam interests.
August
Sbfeer<Swftz) buys Bingham QJS^ pumps.
Talks between General Electric (USX Semens (W G ermany)
Mh power engineering.
'Leighton Morris
Alfa Laval of Sweden in food
ml drink malting equipment,
spurred APVs purchase of
Ba k e r Bakins to the UK and
P inriiac, a Danish dairy and
brewing equipment supplier.
Such deals follow last year's
most spectacular joint venture
in Europe: the merger of Asea
of Sweden and Brown Boveri of
Switzerland. This created a
group with combined sales of
$18bn - a giant that, through
sheer size, has unsettled the
RiTighem, aw important Ore- -rest of Europe's heavy engi
gon-based pump Tnan n f a r t n rBr. netting companies.
Iran and Iraq
prepare to talk
WITH THE GULF ceasefire
which took
apparently still holding despite
repeated accusations of bad
faith by both sides, Iran and
Iraq embark tomorrow on an
attempt to salvage what politi-
cal capital they can from the
wreckage of their eight-year-
conflict.
The first meeting in Geneva
between Mr All Akbar Velay-
atL the banian Foreign Minis-
ter, and Mr Tarfq Aziz, his
Iraqi counterpart, is .bound to
be acrimonious. Achieving a
comprehensive settlement
between the two countries was
always going to be an infi-
nitely more difficult task than,
agreeing a truce — one which
Jar Javier Perez de Cuellar, the
UN Secretary-General who is
presiding over the talks, has
already acknowledged will
have to be measured in years
rather than months.
Nevertheless, the feet that
the two governments are sit-
ting down together so soon
after the ceasefire is a positive
sign and one that in time coold
be boot on to create greater
Stability. Each has, after all.
ceasefire outcome which, after enor-
: Saturday mous death and destruction
ng despite and Iraq's Illegal use of chemi-’
is of bad cal weapons on a large scale,
Iran and merely reproduces the status
ow on an quo ante beUnm. Baghdad's
hat poUti- crowing, moreover, is most
from fiie unlikely to make Tehran any
ight-year- more m a l l e a bl e in the Geneva
talks in reality, fi ds futile con-
in Geneva flict has produced neither vic-
ar Velay- tor nor vanquished, and fixe |
ign Mjxns- peace settlement should reflect
Aziz, his that fact.
.bound to The two main bones of con-
hievtog a tent} on as the talks unfold are
ittlement likely to concern the apportion-
atries was meat of blame for the war (and
! an infi- the attendant Issue of compen-
taak than. satton), and fixe location of the
me which frontier.
During fixe same few weeks,
Harris Graphics in the US has
been absorbed by West Ger-
man p rinHw gr machine maker
Heidelherger Druckmaschinen
which already rfafaw to be the
world’s largest supplier.
Two huge electrical compa-
nies, Siemens of West Ger-
many and America's General
Electric have opened talks on a
possible link-up in power engi-
neering. This follows the
merger of Siemens factory
automation interests with
those of Westinghoose.
All this fits in with a broader
move towards bigness. For
every huge acquisition by a
European company in the US
there has been a string of own-
ership shifts within Europe.
Some, though by no means an
of these involve cross-border
purchases and alliances.
The contested takeover of
Tfldm&ankme, a factory auto-
mation 4 fl | n1| i n M»ti* maker, by
Schneider, a fellow French
company, was part of this. So,
too, was the takeover by MAN
and MTU to West Germany of
the diesel business of Atethran
of France. The fierce battle
between Britain's AFV and
to industries with thousands
of companies, these trends are
by no means universal. For
nwJrfm* tools, the Eu r opean
directory alone is 160 pages
long with an average of six
machine tool companies per
page. The number of valve
muses is so huge it is proba-
bly ungueseahle.
Even when some of these
sectors are home to a big take-
over, it often leaves little
im p r e ssion. Last year’s pur-
chase of Bnschman, the US
conv ey or malar, by Germany's
Demag hardly made a mark to
the heavily compHrtinentalfeed
conveyor industry. Bnt in
those sectors where there hove
always been a few large suppli-
ers as well as a welter of
medium sized and small com-
panies, power is being increas-
ingly concentrated in the
hands of fixe bagger and richer.
. Opport un ism is one reason
for mis, and so Is a self-reinfor-
cing momentum created out of
a fear of being left out But a
lot of corporate boards sow say
that having critical mass is
wR a mti a i to the ability to com-
pete. You have to be a foil line
supplier of a complet e range of
equipment and yon must have
the ffwwofad muscle to scoop
up loss-leading contracts. If
you don’t have the mass your-
self, then buy it or get a part-
ner which has.
The rush of purchases In
North America has been partly
caused by the relative cheap-
ness of US companies - some-
thing that has m ark e d acquisi-
tions In many other industries.
It is also sparked simply by
companies costing un for sale.
Westtoghouse, to particular,
has sold off operations or slid
them into joint ventures at a
rapid pace - creating opportu-
nities for others.
However, acquisitions in
North America have also had
an underlying logic. Most have
been earned out by companies
desp e ra te to grow by gaining a
solid foothold in the big US
market, sometimes with a
well-founded fear that if they
do not bid for a company up
for sale, a European, US or
Japanese competito r wifi.
A classic CTumpte of thla
trend was the decision this
year by Dresser of the US and
Japan's Komatsu to merge
their earthmovtog machinery
manufacturing and distribu-
tion operations in North Amer-
ica.
Between them, Caterpillar,
fixe world’s largest producer,
and Komatsu, the second larg-
est, control 5 0 per c ent of world
sales. Same estimates .suggest
that this share wifi rise to 75
per cent in the 1990s. Both
companies have been adding
products to their ranges
through affiances. Just below
these two giants, I fi tac fai, Flat
and John Deere are fighting
hack by setting np a series of
crisscross deals among them-
Academic
freedom
Observer
UN secrecary-uenereu woo is „ coo
presiding over the taika, has Kcsolntion 5>o
already acknowledged will For the first of these points,
have to he measured to yean provision has already been
rather than months. made in UN Security Council
Nevertheless, the feet that resolution 598, under which a
fixe two governments are sit- ceasefire has been imple-
ting down together so soon merited: as Iran has demanded,
after the ceasefire is a positive an impartial body is to be set
sign and one that to time could up to inquire into respansihzl-
be bust on to create greater fly for the war. Mr Perez de
Stability. Each has, after ail, Cuellar should establish this
spent the best part of a decade without delay, and give it a
trying to prove the other's file- brisk timetable to conduct its ;
gitimacy- By agreeing to talk work: it is bound to report that i
at foreign minister level, they
have already taken the first
Invaded Iran, although its
let will be stitabhr quatt-
step towards burying that spe- fled with considerable evidence
time hatchet. of Iranian provocation.
. r The border prese n ts just as
Political disputes delicate a problem, specifically
Aside from the question of the southern frontier which
recognition, though, fixe pdfiti- runs along the Shaft alArab
cal disputes between fite two waterway. Iran has said disetts-
cal disputes between the two
countries remain almost aa
intractable' as they were when
the war began. Both have undi-
skrns should be based on the
1975 ' Algiers accord, which
places the border along the
minishedrSSonal leadership thalweg, or the middle of the
amhiKnng even if they have Shaft’s deepest c ha nn e l . Presi-
been nwihta to foffll them by dent Saddam, however, who
military means. Each is likely tore + uptteAl^^agr^nmit
to see making concessions, to on tolerigon brfwe invading
the other as a dangerous dis- JJ® 1 m la ? 0 > fe likel y to claim
play .of weakness which could
be exploited at a later stage.
Mr Perez de Cuellar's task is Gao. .
to persuade both governments The issne has imme nse, if
thaTaKSmgii they wifi never aow largely sffmbobc, bnpoi*
be brought to like each other, tance to bon* and the UN
they eX have a leal interest would do well to remove it
in achieving a durable peace temporarily from fixe argument
rather than a settlement winch
gives one side a short-term inte r na tional stewardship for
advantass fixe Shaft at Arab pending reso-
Irao's President Saddam totioncf its final status. A bor-
Hnss3nha?bes£ swift to ctaj>
acterise the ending of bostffi- not be allowed to jeopardise
ties as a maiorvictory. This is the kmg-Magadtances for teal
oya- the water-
l access to the*
an absurd
for an peace in the Gulf.
■JOHN JEWKES, who died
last week aged 88, was a pio-
neering student of the econom-
ics of innovation and a zealous
of I nd ividual ^ aca-
demic freedoms. He loved to
question the fecttxal basis
the conventional wisdom;
despite 21 years as a professor
at Oxford, he did not fit easily
into any school of modem Brit-
ish economists, although Lto-
nel Robbins was a close friend.
His biggest study, of the
sources of industrial inven-
tions to the twentieth century,
was launched in 1958 at a time
when economists had shown
httie Interest in fixe subject
for half a century, bnt when
they were becoming excited
about the Importance of tedtud-
cal ch ange for economic
growth.
- Jewkes thought that econo-
mists should know something
about the way to which techni-
cal progress happened before
they prescribed policies for
its encouragement, and felt
profoundly sceptical of the
widespread belief that the
large research laboratory was
the ideal instrument for pro-
moting invention. His condn-
trinrwt that Haifa large aamp te
of important industrial invw i
tions lad originated outride
such laboratories, and that
encouraging a multiplicity off
sources was the best way of
stimulating innovation, did
not strike responsive chords
in British governments. Bid
his example did help to make
innovation studies and science
policy fashionable branches
of economics, even if the flow
of empirical studies has been
smaller than Jewkes would
have wished.
His work on Invention had
been launched at the Univer-
sity of Chicago, and Princeton
also provided him with a home
from home in America.
Jewkes’s views were always
better received in the US with
its stronger tradition of free
market economics and empiri-
cal research. The institute of
Economic Altehs, of which
he was an eariy supporter, pro-
vided h is most sympathetic
smroimdlngs to Britain. His
fierce attacks on economic
pinpnfo g djd n o t h im
to th« pnHcy jnalrfng
meat — until it rjian p ptj tn
fixe last decade of fob life.
Jewkes belonged to the old
British tradition of economists
who described their findings
inhidd, literate Enghsh-fSo
successfully that Samuel Brit-
tan’s headmaster once con-
fessed he was the only econo-
mist he could understand). He ■
did not share the modern inch-
nation to algebraic conclu-
sions. Nor md he believe that
economists should devote so
much effort to forecasting:
nothing, be once said, baa
done so much to lower the
gfamfing nf gmnnmfafa i than
their claim to be able to fore-
tell the fixture.
Nor (fid he sympathise with
the modem pr eo c cupation with
fixe quantity of their output
concerned with the quality
of Us writing, he once
remarked that it was a pity
that Fritz Machhxp had become
so obsessed with has publica-
tion fist, because be could see
how the quality of bis work
had declined. Machhxp, a true
workaholic, used to say that
it was a pity that Jewkes was
more interested In gardening
than to economics.
He was indeed a keen gar-
dener. devoted to improving
his own garden and that of
Merton College. This interest
went with the other very
Tgnptifch aspects of his charac-
ter. his love of the English
.landscape, its wildlife and its
h rrfltifngw- Tn hfa latAf ya g y
would write in a motor cara-
van on the Wiltshire Downs.
Not, perhaps, fixe image of a
modem professor of econom-
ics; bat bis concent for free-
dom in every sense showed
his affinity with older total- ’
htiiwi tswBBBbt,
' They're painting the extra ■
lane for Sebastian Coe
And its lack
■ to less obvious accord Is the
derision talran by tfr? Thtinrin.
tional Relations Department
at USE that in the coming aca-
demic year its general semi-
xxars8lk)uM no longer automat-
ically be open to research
students. Instead they will
i require an invitation from a
fecufty member to attend axxd
, there win be restricted to one
per feentty member par semi-
nar.
According' to Michael Done-
■lan, who nms the seminars
and w2xo confirmed the new
appr oach , the reason is that
"it is in the general interest
of the department, given the
enormous changes taking jdace ,
on the international scene, that |
the staff shook! get together "
and thump it an about." There
would stiD be the nefcwcak of
specialised seminars.
The problem, pres u mably
to be encountered when LSE
reconvenes in October, is that . ’
the research students may not
agree. There is nothing wrong,
they fed. with intramural fec-
ulty brainstorming, but they ’
regret assigning the popular
general seminars, which fro- .
ouently included good outside
speakers, to this exclusive pur-
pose; they also tend, not unrea-
sonably, to feel that they .
should be exposed as much
as passible to the work-in-prog-
ress and thinking of those at
whose knees they are sitting;
particularly when, to quote
Mr Donelan quoting Bob
Dylan, "the. times they are
changin'”.
And its tracts
■ A grave andsskm from my
list yesterday of notaobto Rho-
desian expatriates Is, of course,
Mr George Webster, professor
of urology at Duke University
in North Carolina.
And scholars
■ A British Rail worker, who
d gng himself Q ufatPtas vapm,
writes movingly in the latest
issue of Modem Railways mag-
azine of the perils of life as
a BE guard. After a passing
comparison with Kipling’s
Tommy Atkins (who was “Sav- ,
four of Ts country” when toe
guns began to shoot) he movBS
on to horrors like the "Scotch
Express," where “some downs
are too drank to know what
a ticket is, let aknxe show It,"
before nphr aMlng BR wumugB . *
meat for denigrating their own
staff. Publius Qninmtos Varus
was a Roman general who
committed suidde after Us
army was destroyed in Ger-
many in AD 9. Who says schol-
arship is dying?
Literacy
■Domflsaysonwdhingabont
the extent to which buyers
of the Sun newspaper caxly look
at the pictures that in spite . .
of its cosrectiy tipping the first
name of the royal intent sev-
eral days ago, WOliainHIli
not a single bet on Bea-
Jurek Martin
aloof from this
there to a small-scale ian«
rush. .
to materials han^ir# &£
CStodustrialgaMstobft
trucks, is bnfldtoe
toant position.
and Still, has for
owned an oper^wfoft®^
and last year pnreha^d Wag-
ner. the w
automated guided 5
gave notice tMs JOT ft
wants to increase rtshg 8
add-on products.
large capital base, I ^ink P^.
Linde,” says one lift truck com
pany manager.
BT in Sweden seems det®*
iMtoad to meet this challeng e
and other bag suppliers, socb
as 7;.»nrfiip in the UK, ung irt
have to follow suit to protect
themselves.
to pumps, (he acquisitMm
Pmnpes Guxnard in France by
iriotn S chanzlia and Becker
and Weir's purchase of Mather
and Platt in the UK to focusing
that industry on a fewer num-
ber of play era. With the take-
over of Pledger in Germany by
Dresser, there are now only
five mqjar suppliers of pomps
for power engineering- In the
fierce three-cornered fight for
the world’s paper making
machinery market, Vabnet in
Finland has been acquiring
other European companies to
give it a much broader product
range in a move which has
worried its two principal com-
petitors, Beloit in tin US and
But Komalsa’s plan to try
and . hunt Cat down has
recently come unstuck. The US
company, once in deep trouble,
fraftw pitting thp heat on
its Japanese competitor.
Komatsu's market share- in
North America has actually
fallen. The deal with Dresser
gives Komatsu new mannfao
fairing space in North America,
extra distribution clout and a
new lease of file in the world’s
biggest market.
Similar motives lie behind
Schindler’s estimated 2500m
purchase of Hie Westinghoose
lift interests. This was
designed both to reduce the
Swiss company’s dependency
on Europe and to attack the
world's number one producer,
Otis, on its home ground.
North America, Before the
acquisition, the VS accounted
for only 15 per cent of Schin-
dler's sales. In the same way
Headelbergsr. which despite its
$Llhn sales had no production
plant outside Germany, saw its
2300m purchase of Harris from
AM International as a way of
getting farther into the North
American market.
The same kind of thinking
partly governed another big
move in heavy engineering
this year - the decision by
Asea Brown Boveri (ABB) and
Westinghoose to combine their '
North American power genera-
tion and transmission busi-
nesses into a pair of large joint
ventures. The two joint ven-
tures - in which Westingh-
ouse has a 65 per cent stake -
have tibn of sales and 1&000
employees. Before those merg- .
era, ABB was an outsider In a
US power market which nLwTiV
accounts for J2S per cent of
world electricity consumption Germany's Vofth.
and is dominated by General Even in agricc
Bfeetrlc and tatestftighniiBft. menh where tfaer
Another of Westingboxxse’s
itoik — lumpin g its transpor-
tation eq u ipmeartbnstnegses in
with those of West Germany's
AEG - was also motivated, it
appears, by the desire to obtain
some kind of critical mm«
AEG itself ' is vow owned by
TtewwliaJtot* -
Tha usual arguments about,
combining research, marketing
MmR product Www iwrfA* wimp
of these deals were the product
of fear. Schindler was worried
that someone else, like Koine of
Finland or one of fixe big Japa-
nese hit makers, would step in.
Horst Slayer, Heldelberger’s
safes director, says the com-
pany was afraid that Harris
would tell into the hands of
Konxori, the rapacious Japa-
nese printing machinery
maker. Kotmori had made a
substantial offer for Harris, an
acquisition .which would have
g ven Komori a production
tihty in Europe.
Percy Bamevlk, ABB’s chief
executive, says the formation -
of fixe North American joint
ventures with Westinghoose
gives the two companies more
strength and ftaxOnUy to com-
pete with the Japanese. In
power engineering, Mitsubishi,
Hitachi and Toshiba have huge
ca pital bases technological
capability.
These deals across the. Atlan-
tic are being, mirrored by
increasing concentrations of
power within Europe. The Mg
UK and Italian- engi neeri ng
groups appear to be standing
Even tn agricultural equip-
ment , where there has already
been a Mg shakeout, changes
are continuing. Deutz in Ger-
many is slowly absorbing the
Mercedes tractor division and
oxtering a co-operation agree-,
ment with Greenland, the
Dutch maker of bailers and
nfrnr w j nt p uwnt .
It is in power engineering,
though, that the E u ropeans are
really getting shaken np.
"Everyone is Miking to every-
one eke. There is more of this
going on in this indnstry than
at any time before;” says Bob
Davidson, head of the power
engineering division of CSC in
the UK.
The merger of the techni-
cally competent Asea with the
larger hut weaker Brown Bov-
eri, the prospect of a more
open European market after
1968 and the pressures of a
cyclical industry are already
having their e f fec t Alsthom’s
purchase this year of the
power equipment business of
AGEC in Belgium wOl almost
certainly be followed by other
There is no g u ara nt ee fiiat
all these realignments will,
work. But if many do work,
which type of company will
lose as a result? Conventional
wisdom says the losers will be
those middle sized groups that
try to fight it out head to head
with the big companies, but
with far smaller resources!
This view is not yet proved.
Bnt it will be tested during the
next Mg cyclical downturn in
w or ld wi de demand, whenever
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FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
e
be Government discus-
sion paper on vUUn
bousing 1 issued in July
by Mr Nicholas Ridley, the
Envi ronm ent Secretary. bofrUy
trumpeted its commitment to
preserving the traditional way
of life in the British village. •
"No one wants to see a typi-
cal small village fW
new suburban development or
ribbon development
out along country roads or
haphazard scattered develop-
ment In the countryside,” ft
declared.
But these sentiments will
cut little ice with many of the
6m people in England a nd
Wales, 16 per cent of the total
population, who live in about .
10,000 villages or towns of
under 5,000 inhabitants. Many
small communities have
already been swamped by new
housing.
The Government paper pro-
posed the construction of
entirely new villages in the
coun tryside and the encourage-
ment of housing
to provide low cost honin g .
This initiative, which has bad
a m ixed reception, was partly
in response to political pres-
sure fmm Conservatives who
are disgruntled over the despo-
liation of their rural retre a ts.
Under the present planning
system it is difficult to prevent
Development
Ashfey AshwootJ
Hatch Beancfrmnp , which feds thr e aten ed by too rapid expansion
builders nibhWng away, at vil-
lages with fin-in developments
or what are virtually new
estates on the outskirts. Unless
a site is In the sacrosanct
green belt or there is a specific
reason against a particular
project, the presumption is In
favour of the developer.
The development of the high
speed train mid tie motorway
have brought idyllic areas
within the reach of the long
distance co mm u t er. There has
also been a big increase in the
retirement population moving
out of towns. The number of
pensioners in -the English Lake
District, for instance, has risen
by 13 per cent between 1971
and 1981, 10 times the national
average.
At the same time the
run-down in farming has
meant a darftiw in the indige-
nous rural population. The
number of Item labourers has
dropped by a third over recent
years.
As the newcomer* from the
towns move In to hew, high-
priced homes, local young peo-
ple cannot afford the price of a
starter home. A report* from
the Association of District
Councils (ADC) yesterday calls
on the Government to make
more economic assistance
available to create emplo yme nt
in rural areas "and *i*o pro-
poses schemes for cheap
starter homes — with restric-
tions that would prevent the
original purchaser wdHng the
home at jm inflated profit
One such scheme was
A built-up and
unpleasant land
John Hunt looks at the problems of villages
threatened with commuters or retirement homes
opened at Chipping Campden,
Gloucestershire, with Mr BJd-
Tey’s encouragement But the
ADC says that ironically, the
Government’s rigbt-to-buy leg-
islation has since made these
schemes hn poanHMr*
The feelings of threatened
villagers Is summed up in a
parody of Goldsmith's poem.
The Deserted Village, con-
tained in a local appraisal by
the people of Durweston, near
Blandford Forum, Dorset It.
expresses the fear that the
local people and "Dorset**
speech will be swamped by
elderly strangers speaking an
alien tongue. Such appraisals,
now conducted by many vil-
lages, are in effect consultation
documents expressing the
wishes and feelings of local
people on planning matters.
Durweston, a picture post-
card village of thatched houses
with a population of Just over
300, can rfabw to have the
developer at bay so far. At
Batch Beauchamp, a dniflur
village of 400 people and 200
houses, 40 miles away near
Taunton, Somerset, the picture
is very different.
For the past six years the
parish council of Hatch Beau-
champ has been fighting to
Hmtt the level of new bnflding
in its community of stone and
slate houses huddled round the
village shop and pub. The
council negotiated with Taun-
ton Deane Borough Council to
establish a local plan that
would phase in an acc eptab le
amount of development over a
10-year periopd. The plan Is
now in its final stages - but
more houses have already been
buflt in the village than the
plan allows for until 1996. Per-
mission has just been given for
further houses on another site
and there are rumours at yet
more
The plan allows for a steady
by 50 new dwellings
up to 1996k an increase of about
25 per cent But already 57 new
houses have been built or are
under construction *m«i plan-
ning permission has been
given for a further LL
The new homes are in keep-
ing with local architecture. But
it is the speed of development
and the possibility of being
swam p ed by still more bnflding
that wonies local people. Some
two-bedroom dwellings started
at £44^)00 but those now going
up are £175.000 for a four-bed
and £195,000 for a five-bed
house.
Mrs Jane Smale, vice chair-
man of thp parish council,
emphasises that the villagers
are not against all develop-
ment, but they do want, the
expansion to be controlled.
LETTERS
Law according to Augustine
From Mr Leo Bend.
Sir, Is the point of Michael
Dixon's article ("Legal eagles
and other birds of ill omen,"
August 17), examining statisti-
cal links between national pro-
ductivity and the perce n tage of
lawyers In « population, to poll
lawyers’ tafia - or Is same-
- thing morn interesting
HI* siatistic*E«ufoatity is
Mr Norman Augustine, chair-
man of the Martin Marietta
Corp oration. The independent
existence of Martin Marietta is
a lawyer's creation. Without
“the double-pac man defence”
(an attempted takeover
defended by a bid by the target
company ngntnot the bidder)
and the fcghmB of lawyers and
Judges Jt took to accomplish it,
there would be no Independent
Martin Marietta today.
U the impHeatian ft that fMw
kind of lawyers* activity is
without economic value or —
worse - wasteful, that is an
Interesting point end I am sure
we would all like to hear more.
On the other hand, the asso-
ciation between lawyers and
economic decline may be a ran-
dom one; or both economic
decline arid the number of law-
yers may be associated with
some other variable.
la short, do Messrs Augus-
tine and Dixon know some-
thing, or are the statistics Just
for laughs
Leo Herzel.
Mayer- Broom & Platt,
190 South La-Sal Te Street,
Chicago,
Illinois,
USA
No ill wind
Landlocked
S&v Yoa report yz
that British Gas was obliged to
writ* to all S.7M «Mte shwe-
holdare to inform them of a
. new ntmdntilon to tts board
May L on behaK of the enve-
lope industry, suggest that all
pahSc companies adopt a&hflar
danaes in their articles of asso-
ciation?
Peter Ventage.
Mekoate limited. RuodoptBro-
has. :
Orange Mil ls,
Wdr.Baad, SWJS ■■ ■
From Mr JB. BirsL
Sr, “It has long been obvi-
ous that fewer people are
needed to produce Europe’s
food. Now it is also dear that
far less land needs to be
fanned” (FT leader, July 26).
In such circumstances, Is it
in the national interest for
there to be an artificially cre-
ated shortage of building land?
J3. Hirst,
2 BoUy Park.
Buby.
near Leeds, Yorkshire
Unprepared for 1992
Batsmen battle on
From Professor Peter Moors.
Slr, Mr Peter Kronur com-
plains that the royal baby was
weighed in pounds and ounces
(Letters, August 16).
Your stock market report
quotes Treasury 11% per cent
stock standing at 102 27/32. Let
us eitakst master de cimals ,
Sk. before we attempt, metrica-
tion.
Peter G- Moore,
Principal.
Loudon Business School, : •
Sussex Place, ■
Regent's ParkNWl
From Mr J.T. Joinings.
Sir,. To redress the balance
between fast bowlers and bats-
men, Mr F. Holme suggests
lengthening cricket pitches. to
25 yards and designating the
bowler's half a “no ball" area
(Letters, Augdst 16).
An altern a t i v e solution, and
perhaps a cure for some dan-
gerous current practices, is to
label as “wides” all balls that
pass over the wicket above
bead height.
J.T. Jennings,
37 Albert Embankment, SEl
‘ . Critical paths in conventional defence
Fttm Mr Graham Leman.^
Sir, Professor Nefid (Lettew*
August 19) has unfortunately
missed the m»ln point (Letters,
August 10). Weapons. as such
cannot be either inherently
defensive or inherently offen-
sive In character.
If each side is equipped vdth
the same weapons “ whether
tanks or pikes - those weap-
ons can be used indifferently
either to attack or to defend. If
neither side has any tanks, a
man with a rifle Is as danger-
ous as a man in a tank would
be. (Some years ago the Tanza-
nian army, a light infantry
force which had to walk every-
where. successfully invaded
Uganda and installed a new
regime more . to Julius
Nyerere'a taste.)
It might be a bit difficult for
us and the Russians each to
persuade our own soldiers and.
defence industries of anything
as ambitious as Professor
Nefld's "no tanhB**opt to a. For
instance, for the foreseeable
future tins Russians will con-
tinue to administer a huge
land empire. They may well
think that they cannot do with-
out tanks and armoured infan-
try. even for internal security
purposes only; and our gener-
als would no doubt advise us
that we needed these too, to
keep the balance.
A less ambitious attempt to
limit the forest of war posed
by these forces (perhaps by
agreeing to limit their logistic
capability, under verification)
could be quicker and easier to
agree, AH we need in the short
term is some stabilising mea-
sure just powerful enough,
first, to relieve us of the threat
of early decisive results; sec-
ond, to torn the trends in con-
ventional forces from a vicious
into a virtuous spiral.
Rwhimi» Twrwin
U Shakespeare Road. W3
‘A company has at least four stakeholder groups’
Prom Mr Andrew Campbell
Sir, Martin Taylor argues
that “central managements,
job is to add value for the
shareholders". His implication
(Letters, August 1) is thaf
vaiuo to shareholders should
be the prime objective far all
W £?^p«w In busiMM fo
create wealth for its sharehold-
ers, to provide employment for
its managers and staff, ot to
produce outstanding products
for its customers? Wealth cr^
attam as the prime objective »
not the answer you would
receive from any Japanese or
- European company - nor from
Sainsbury’s. nor Maries and
Spencer, two of Britain's most
: successful Companies.
The reason Is that a com-
pany has at least four stake-
holder groups whose loyalty it
amt retain ff It isto -prosper:
shareholders, employees, cue- .
tomers and suppliers. Each of
these groups can help the com-
pany succeed by commitment
and support - or contribute to
the company's failure by leth-
argy and indifference.
- For many managers this cre-
ates a problem of priorities.
When there in- a conflict
between . employees and share-
holders, for example, which
-group should management
favour?
fit -seems possible to give pri-
ority to any one of toe four
stakeholder groups and still
have, a- viable organisation.
Hanson favours shareholders.
Sainsbury’s, on the other hand,
quite explicitly pianos share-
holders last in the ranking of
its stakeholders. (B« fifth and
final objective is M to generate
sufficient profit to finance con-
tinual improvement and
growth while providing our
shareholders with an excellent
return on their investment".)
Success comes from adding
value to - and therefore
retaining — the loyalty of all
the stakeholders.
Andrew Campbell,
Ashridge Strategic Management
Centre,
iKmgstoay WC2
1 am optimistic that we will
retain its character. But we
have only been successful so
far "
Village over-development
plac es great strains on infra-
structure and social services.
Many villages no longer have
resident doctors and local hos-
pitals have been dosed. Dwind-
ling pupil numbers have
caused the closure of many vil-
lage schools. The reduction in
rural bus services and an
influx of people relying on cars
means parked vehicles jam-
ming narrow village streets.
MOny village post offices have
closed or are under th r^t and
there are fears that the intro-
duction of the uniform busi-
ness rate could force even
more of tha marginally profit-
able village shops out of busi-
Tt ft spoiling the village."
she says. “I don't wish to be
pessimistic but now the devel-
opment has started I don't see
US r wniaftring
A public inquiry failed to
halt it and an attempt to take
the matter up with the
Ombudsman was tffimrawuefTiI-
in a letter to the then Con-
servative MP for Taunton, Sir
Edward du Cairn, Mr Ridley
stated: "To defer action on
such applications pending a
public inquiry Into the local
plan could be seen as an unrea-
sonable imposition on develop-
ers In that it might prohfoit or
delay development which could
reasonably have been permit-
ted.”
At Durweston, the parish
council has worked closely
with North Dorset District
Couocfl. The draft local plan
proposes that 45 new dwellings
should be built in the village
for the period 1990 to 1996. As
some have already gone up
during that period, the plan
allows a further 28 up to 1996.
Most of the land in and
a round the village ft owned by
foe Crown Estate Commission-
ers and this ft probably why
developers have found it diffi-
cult to obtain building sites.
Mr John Hosford,who has
taken a leading role in preserv-
ing the village, says cautiously:
The natirc villagers feel they
cannot win. More population
would mean that some of these
services could be saved; but
the development that goes with
more people ccmld rain a cher-
ished way of life. Mrs Cather-
ine Chafer, secretary of Rural
Vodce,- a TMtimwai anftnee of 10
voluntary organisations, says
market forces will not solve
rural housing problems. She
b el i ev es the Government’s pro-
posal for new villages ft com-
pletely irrelevant.
Action With Cnwnnnnffiag in
Rural England (Acre), in a
recentiypnblished report, Who
Can Afford to Live in the
Countryside? 9 proposed that a
local needs category for social
housing should be added to the
planning system. Under this
designation planning permis-
sion would be given on the
understanding that building
would only be done by a hous-
ing association.
While the debate rages, pres-
sure on village life rises. Gov-
ernment figures show that
over foe past 20 years the pop-
ulation in many rural areas
has increased by more than foe
national average, while the
population in the large towns
and cities baa fallen.
But village existence ft not
always as unarming as tourists
might suppose. In the Dnrwes-
ton appraisal some local people
described their life-style as
“paradise" or “pure heaven"
while others, pres uma bly the
restless young, dismissed it as
“extremely boring" or "stag-
nant”
*. Bousing in Rural Areas :
Village Bousing and New VU -
lages, a discussion paper,
Dqiartment of the Environment,
July 1988
* The Future for Rural Com-
munities, Association of District
Councils, 9 Buckingham Gate,
London SW1E 6LE, £5
\ Who Can Afford to Lice in
the Countryside? £3.50. ACRE.
Stable Yard, Fauford Park,
Fauford, GIos
Third World Debt
How to escape from
the impasse
By Gustav Ranis
M anagement of the
"debt crisis," which
broke upon foe world
in August 1982, has reached an
impasse. The creditor devel-
oped countries prefer to perse-
vere with foe country-by-coun-
try approach of structural
adjustment packages orches-
trated by the International
Monetary Fund or World Bank.
Meanwhile, the indebted devel-
oping countries want global
solutions, by which ft meant
either general debt relief or a
new international debt facility.
Proponents of foe case-by-
case approach take comfort
from the recent performance of
Mexico, which has swallowed a
painfol dose of adjustment and
seems to be turning the comer
- as well as from the opposite
experience of Brazil, which has
pulled back from its exposed
position as the first major
debtor to refuse to make inter-
est payments.
Proponents of foe global
approach emphasise that many
debtor countries - including
Peru, Bolivia, Ecuador, and
Nicaragua - are already tech-
nically in default. Further-
more, private creditors are
offering an expanding menu of
debt relief options, including
shaving margins over Libor,
debt-for-equity swaps, 20-year
zero-coupon bond purchases,
and interest capitalisation,
while official creditors are
coming ever closer to forgiving
Africa’s public sector debt alto-
gether.
It is little wonder that Con-
gressman David Obey’s House
Appropriations Subcommittee
recently refused to include a
mere $70m (£42m) US contribu-
tion to a World Bank capital
enlargement unless the Admin-
istration comes forward with a
more comprehensive plan to
deal with the debt problem.
It is not that nothing hew
been accomplished since 1982.
Surprising flexibility has been
shown by all the relevant
actors, both on the creditor
and foe debtor side, including
even the more vulnerable
strata of the populations of the
developing countries. None the
less, all efforts to find addi-
tional resources, both public
and private, and to convince
debtors that yet one more dose
of austerity ft required, have
merely bought time, without
any clear notion about how
that time should be nq«i
The Baker Plan of 1985 ft a
case in point. Beyond its
emphasis on a continuation of
the case-by-case approach and
its (quite unrealistic) call for
substantial arirtrtinnal lauding
by the commercial banks, it
proposed nothing new, except
for vague references to a larger
role for the World Bank rela-
tive to the IMF. It gave no rec-
ognition to the spread of
"adjustment fatigue," and
assumed implicitly that indus-
trial country growth would
refloat even the most battered
developing country ships.
More and more people won-
der how much longer debtor
governments can exact sacri-
fices from their people for so
uncertain a return. This very
uncertainty is why commercial
h anks are unwilling to make
the additional loans that Mr
Baker proposed and why foe
people of the developing coun-
tries have become increasingly
restive.
In seeking solutions, one
must remember that most
indebted countries had a devel-
opment problem long before
they had a debt problem. While
details differ from country to
country, resolution of these
underlying development prob-
lems usually require long-term
organisational and institu-
tional changes, quite apart
from changes in economic pol-
icy. The total' reaches far
beyond the customary adjust-
ment packages of foe case-by-
case approach in both scope-
and duration.
Meanwhile, the sharp diver-
gences in development perfor-
mance since the 1950s bring
home the danger of half-baked
global solutions.
Across-the-board debt relief
may do no more than reward
the profligate. The ready avail-
ability of Opec surpluses in the
1970s confirmed too many
developing countries in the
appropriateness at foe ineffi-
cient growth paths they had
chosen, so aborting many a
movement towards reform. Ill-
considered debt relief could
bave much the same result
today.
Resolution of the develop-
ment problem must be
assessed country-by-country,
as conventional wisdom
assumes. But foe capacity to
achieve something significant
in each individual case
requires a change in global
arrangements as welL There
must be more resources for a
longer period as a carrot for far-
more comprehensive reform
than anything now contem-
plated.
Successful structural adjust-
ment requires not a two-to-
three year, but a 5-10 year per-
spective. In addition, the provi-
sion of additional resources
without full understanding and
political acceptance of what
needs to be done ft likely to
have the opposite effect to
what ft intended: the pressure
for reform may be reduced.
When the chips are down, the
creditors' need to lend usually
turns out to be more powerful
than the ppwj to ensure the
quality of the process.
In short, the best in the
global and country-by-country
approaches must be combined.
What is needed ft a global
capacity to support long term,
ambitious structural adjust-
ment programmes. In countries
whose governments are willing
to accept such an approach,
teams would be established to
develop medium term pro-
grammes. These would focus
on both the required policy
changes and fow addit i onal for-
eign exchange needs of the
country, over not less than a
5-10-year period.
The process must be
endorsed in advance by both
the internati onal financial
community and the govern-
ments concerned. All must
agree that the technical assess-
ment is the point of departure.
One or two real successes
would demonstrate foe effec-
tiveness of the new approach
against that of current prac-
tice.
What ft needed now ft some-
thing more ambitious, but not 1
more permissive, than the
present approach. Muddling
through ft not a long term
alternative, for its inevitable
c ulminat ion will be large-scale
friendly, or not so friendly,
defaults.
The author is the Frank
Altschul Professor of Interna-
tional Economics at Yale '.
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FOR BUSINESS. FOR LffESTYLE.
— FOR YOU.
SEPiiia
FINANCIAL TIMES
Wednesday August 24 1988
■JUKI!
The Master Printers
jUBgU!Wa«)CMW!
T«L 040)251 20 71-73- Few.; p4M2»ga»-
City demand strips Treasury assets
Ralph A tkins reports on the defection of British economists to the private sector
H UMBLE British Trea- “ „ financial economist j
sury economists, serv-
ing Her Majesty Queen
1 l \ ( O! I M \
H UMBLE British Trea-
sury economists, serv-
ing Her Majesty Queen
Elisabeth in once-grand offices
overlooking Whitehall, Lon-
don, might be forgiven for
thinking the grass is greener
on the other side.
Across town, in City of Lon-
don dealing rooms, the econo-
mist lives in a world of high-
tech and high cheques. There
are perks galore: bonuses,
expense accounts, cheap mort-
gages and the chance of glory
on television news.
■ If there is a simple explana-
tion for this wide City /Trea-
sury divide it can be set out;
ironically, in terms of demand
and supply curves - the basic
tools of the professional econo-
mist
On the wrong side is the
Government Economic Service
(GES). Competition for a lim-
ited supply of good economists
led to a doubling in the resig-
nation rate among Treasury
economic advisers last year
- to nearly 30 per cent
For the whole GES - which
boasts almost 400 staff includ-
ing TO in the Treasury - the
resignation rate in 1987 was
about 10 per cent Among grad-
uate entrants to the GES there
were fewer applications to be
economic assistan ts in 1987
than in any other year thin
decade.
The divide was highlighted
in June. An article in FDA
News, the journal of the First
Division Association of top
civil servants, complained of
low morale arid high wastage
rates.
“Economists feel that their
position is being undermined,
but are unclear whether it is
due to incompetence, poor
management or deliberate pot
icy. In such a setting, even con-
spiracy theorists receive a
hearing,” wrote Mr Dan Cony,
the aggrieved Treasury econo-
mist
The depressing picture begs
the question of the quality of
economic advice the Govern-
ment is now receiving. Work is
.•vv- vwatr” gy*
'“'OL, s' i , : J?' '*■ S : .
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it*
tutions. Salaries at the top are
rumoured to approach £250,000
($417,500) even before perks, A
competent ex-Treasnry 24-
year-old could expect to start
on £20,000 a year with bonuses
and mortgage subsidy.
In contrast the starting sal-
ary for a graduate nnHw 26
years old in the GES based in
London will be £10,150 from
October.
Economic Advisers, who
must have at least five years
experience, will have salaries
ranging between about £L8£00
and £23£00. Additional perfor-
mance points introduced from
October could take the most
able, after a period of years, to
a maximum of a little above
£27,500.
Top City economists are
becoming harder to fmri - and
being delayed while the reli-
ability of Treasury economic
forecasts is being challenged
by City analysts.
The Treasury says falling
graduate a ppikjjtlnnB have not
hindered recruitment at this
level The problem seems to be
more in retaining the older,
more experienced, economic
advisers. “If your colleagues
are moving off quite often,
then yon wonder why yon are
hanging about,” said one
insider.
Mr Nigel Lawson, Chancellor
of the Exchequer, has derided
City economists as “teenage
scribblers”. It would be embar-
rassing if the age profile of his
own team tumbled too far.
On the other side of the
deman d curve are economists
wmking for big financial ins#.
Upbeat A$5.5bn budget
By Chris SherweH in Sydney
MR" PAUL KEATING,
Australia's federal Treasurer,
yesterday announced an
upbeat budget promising con-
tinued strong economic
growth, increased investment,
lower unemployment and
reduced inflation.
The package included a
record budget surplus of
A$5A7bn ($4.44bn) for the year
to June 1989, a further reduc-
tion in the current account def-
icit to A$9.5bn and evidence
that the country's external
debt was stabilising as a per-
centage erf gross domestic prod-
uct
As such, it appeared to con-
firm Australia’s transition
from the gloom of 1986, when
Mr Keating said it was in dan-
ger of becoming a “banana
republic”, to a boom which
leaves the Labor Government
well positioned to fight the
next election, due in 1990.
In line with this, he prom-
ised income tax cuts to take
effect from next July provided
a wage-tax tradeoff could be
negotiated with the union
movement The size of the cuts
would depend on what hap-
pened to wages in the interim.
The projected budget surplus
is equivalent to 1.7 per cent of
gross domestic product and
means that some A$6bn of
domestic and foreign debt will
be retired and the net public
sector borrowing requirement
will come down to zero.
GDP growth in real terms is
forecast at &5 per cent all of it
coming from domestic demand.
A surge in business investment
is foreshadowed, and unem-
ployment is expected to fell to
7.25 per cent
Continued from Page l
Antwerp assembly works into
one plant capable of producing
392,000 cars a year. This week
it is introducing a new man-
ning system with three crews
working a pattern of two 10-
hour shifts a day, six days a
week (with a single shift on
Saturdays), giving a plant util-
isation of 110 hours a week
compared with 75-78 hours
under conventional labour
agreements.
GM claims the Antwerp
plant will be the most produc-
tive in the European motor
industry. “This is the non plus
ultra," said Mr Hans Gensert.
GM Europe’s executive director
for manufacturing, “there is no
one (in Europe) that can beat
Antwerp with this kind of
agreement."
Production erf the new Vec-
tra/Cavalier begins this week.
It will be introduced at the
Paris motor show next month,
and will be launched in all
European markets during the
autumn, starting in West Ger»
many and the UK in mid-Octo-
ber.
GM Europe is planning to
produce about 350,000 units in
1989, the first full year of pro-
duction, compared with an out-
put of 235,600 units of the exist-
ing Ascona/Cavalier last year.
“With this new model we
will make a strong drive for
market (segment) leadership,”
said Mr Thomas Mason, GM
Europe’s vice-president for
sales.
The increasingly competitive
mid-range segment accounted
for 2.7m cars or 22 per cent of
the total West European car
market last year. GM is aiming
to restore its share of the seg-
ment to more than 13 per cent
from the 9.2 per cent held last
year by the ageing Ascon-
a/Cavalier.
“It is a profitable market
where all manufacturers are
concerned about doing well,”
said Mr Mason.
GM’s existing so-called J-car,
badged as the Opel Ascona in
continental Europe and the
Vauxhafl Cavalier In the UK,
Left, the British Treasury:
losing its economists to City
of London institutions, and
above, Mr Nigel Lawson,
Chancellor of the Exchequer,
who has derided City econo-
mists as “teenage scrib-
blers”.
can almost afford to dictate'
their own terms and condi-
tions. “If som eone is lo oking
for an economist and they need
a good one, then they wQl out-
bid the market to get him,”
says Mr Andrew Stewart,
.senior consultant at BBM Asso-
ciates, the head-hunting con-
sultancy.
Among the cast-list of lead-
ing players at well-known secu-
rities houses, there are enough
former Treasury economists to
form a decent-size dining dub.
The membership list would
include Mr Steven Bell, 35, and
Ms Evelyn Brodie, 30, chief
economist and senior UK econ-
omist r espect i vely, at Morgan
GrenfeEL Mr Stephen Hannah,
35, UK economist at County
NaiWest is ex-Treasnry. So too
is Mr Simon Briscoe, 29, senior
financial economist at Gtoeen-
weft Montagu.
At Phillips A Drew, Mr Mark
Brown, senior US economist
and M r Chris Johns, senior
currency economist, would be
djgibte for membership. And
at Chase Manhattan Securities,
Mr Nett MacKinnon, 33. senior
economist, gleefully describes
himself as a “former teenage
arribbipr to the Chancellor”.
Although the private sector
economists appear to be the
clear winners, there is a twist
to the demand and supply
curves.
High salaries among City
economists reflect fierce com-
petition a awn band of
perhaps no more than 200. And
there are fears of a possible
shake-out in the face of thin
turnover in equities and.
gut-edged securities compared
with the halcyon days before
the October stock market
‘crash.
Pressure is intense. Dealers
and traders aim to be one step
ahead erf the market but the
economist has to be at least
three. Dealers meed to know
what tomorrow’s economic fig-
ures will mean for markets;
economists have to forecast
what next month’s statistics
will be.
A high profile is esse nti a l .
Business depends on the qual-
ity of frifnrmarin n and tile cli-
ent list wQl be longer if a secu-
rities house can boast an
economist with “gum” status.
Economists' role in promo-
ting the firm provides some
protection. They are regarded
almost as a a™* overhead for
a market-making operation.
Market forces, however, may
find their own solution to the
Treasury’s problem. It is
harder weak making a living
when the FT-SE 100 share
Index is no longer climbing
■ever upwards. Salaries may be
trimmed, staff levels cut back
and the pressure intensified
still further.
Then the path from the Trea-
sury may not seem so attrac-
tive.
Moscow’s neighbours
grow restless for change
The cur r ent account deficit
is forecast to foil to 3 per cent
of GDP from 6 per cent three
years ago. But Mr Keating said
that, “while the balance of pay-
ments deficit is Australia’s
number one economic problem.
Infla tion remains Australia's
number one economic disease.”
He predicted that the infla-
tion rate would foil to per
cent by next June, helped by
indirect tax changes, and said
that this could fall further
under the scheme linking wage
increases and tax cuts.
In his speech to parliament,
Mr Keating said the nation was
emerging from its most severe
economic crisis in a genera-
tion, and that the economy was
being systematically restruc-
tured to make it better able to
compete internationally.
Details, Page 8
GM seeks European leadership
was Europe’s best-selling car
in the intermediate segment
for three years in the mid-1980s
and was the major factor
behind the transformation of
the fortunes of Vauxhall, GM’s
UK subsidiary, which almost
doubled its share of the British
car market from just over 8 per
cent at the beginning of the
1980s to a peak of 1G.6 per cent
in 1985.
• The .sector is currently domi-
nated in Wbst Europe by the
Ford Sierra, which captured a
13^ -per cent share last year,
followed by, the Renault 21
with 12 per cent and' the
Citroen BX with 101 per cent
The launch of the new Veo
tra/Cavalier will further Inten-
sify the pressure on Ford, the
market segment leader, whose
Sierra replacement is thought
to be at least two years away
and which is already facing
added competition this year in
the shape of the Peugeot 405,
launched in the UK in Janu-
ary, and the new Volkswagen
Passat, launched In the spring.
Poland rejects
Walesa talks
Continued from Page 1
/■
friends outside the yard tried
to get as close as possible. The
' three crosses monument and
the nearby main gate erf the
shipyard, which was festooned
with Solidarity banners and
religious symbols, .were cor-
doned off by the police.
Most inhabitants of Gdansk
went about their daily affairs
calmly but the main topic of
conversation was the strike.
There was no evidence of panic
buying or hoarding in G dansk
as had been reported from,
other parts of Poland
C o nti nue d from Page 1
adopt, such reforms as Mr Gor-
bachev is implementing in the
Soviet Union, the pressure for
change is coming from outside
the ruling Communist parties,
with the sole exception of Hun-
gary.
But what must concern the
leaderships most of all is that
this pressure is taking the
form of specific national inter-
ests.
Such national interests were
never articulated in the past
Differences within and among
the allies of the Communist
camp were discouraged. Dis-
putes between neighbours
were simply not allowed. But
. this is c ha ngin g - The advent erf
Mr Gorbachev has meant that
the allies can criticise each
other more openly. The prob-
lem for Mr Gorbachev and
Eastern Europe's leaders, how-
ever, is that the criticism is
taking an a specific form of
political nationalism which
moves outside the Communist
parties. Poland and Hungary
are striking examples of thin
trend.
While some Solidarity activ-
ists believe that Mr Gorbachev
promises a degree of hope, the
bulk of Polish society sees the
world largely through anti-
Communist eyes.
During the 1970s, Poland
could boast one of the most
liberal systems in the bloc
while, at the same time, the
regime of Mr Edward Gierek
engendered outward national
feelings to bolster the popular-
ity of the Polish Communist
party. For example, the his-
toric Royal Palace in Warsaw,
one of the seats of the Polish
kings, was rebuilt as an expres-
sion of national identity, and
the Polish eagle was once
again hung in offices.
Yet such nationalist expres-
sions and rituals remained
devoid of political content and
could provide no lasting substi-
tute for independent political
participation by ordinary
Poles. The upshot is that today
most people continue to refuse
to support a regime which is
not of their choice.
However sincere Gen Jaruz-
e Jff ki is about pushing through,
economic reforms, workers
reckon that they, and not the
party, win have to pay the cost
of such reforms in terms of
higher prices, an appalling
infrastructure, a deteriorating
environment and little chance
of owning a car or a flat for at
least 15 years.
Indeed, the growing feeling
- if it is not already too late to
begin overhauling the wwnnrny
radically and rebuilding the
infrastructure - is that only
by allowing genuine indepen-
dent political institutions can
the country's leaders gain
some support for their reforms.
The situati on in Hungary is
Utl
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T«ytor Woodrow
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just as complex. The Govern-
ment there has gone furthest
with a form of “socialist plural-
ism," but at the same time it is
allowing "national interests”
to gain greater ground. One
reason Is that the economy is
so bad that nationalism serves
as a useful but potentially dan-
gerous way <rf deflecting dis-
content from economic Ws.
Last weekend clearly demon-
strated these se n ti me n ts. The
Government for the first time
commemorated the 950th anni-
versary of the death of Hun-
gary’s first King, St Stephen.
He, and particularly the Crown
of St Stephen which was
finally returned to Hungary in
1978, is hugely symbolic for the
present leadership since pos-
session of the Crown confers
legitimacy.
The anniversary thus
stressed the continuity and
legitimacy of the Hungarian
state and implicitly of the pres-
ent Communist leadership.
But it is not only history
which the authorities regard as
an increasingly important tool
for establishing a sense of
Tiptiorini identity gnfl diverting
attention away from economic
hardship. In recent months,
growing numbers of Hungari-
ans have protested openly
against the planned destruc-
tion of ethnic Hungarian vil-
lages in Romania.
According to Hungarian
experts, the dam will do irrepa-
rable damage, not only to the
environment but to the natural
underground water filtering
system. For the moment, the
Czechoslovak authorities back
the project fully. But the Gov-
ernment, aware of the opposi- .
tion and the mounting criti-
cism, could well be forced to
pull out of the scheme.
If it did, Mr Kandy Grosz,
the party leader, would become
enormously popular. However,
that decision would inevitably
mean a victory for national
interests.
Such interests have taken a
different form in Czechoslo-
vakia. The young people, many
of them babies m 1968, who
marched last Sunday night on
the 20th anniversary of the
Prague Sirring, used history to
stress their own sense of iden-
tity and political conscious-
ness. Instead of calls for Mr
Gorbachev, they chanted the
name of Masaryk, the first
President of an independent
Czechoslovakia.
Since the Communist take-
ova* of the country in 1948, his-
tory has been rewritten and
distorted many times by suc-
cessive leaderships. But it is
history which is providing the
link between the present,
younger generation and the
democratic traditions of a pre-
war independent Czechoslo-
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oagemenfs eagerness to
reduce the dependence on
Hong Kong.
Taylor Woodrow
It cannot be pure coinci-
dence that Taylor Woodrow
shnnlrt unveil a liiflgnlflwgit set
cf interim figures, a top man-
agement reshuffle and an
increase in the share stake cf
the founder and his wife, only
a mont^i after P&O bought a
stake in the company. While it
would be unfair to suggest that
Taylor Woodrow is sacrificing
its traditional conservative
stance to bolster its short-term
performance, FAQ’s arrival on
The reason for Shell's nota-
ble absence an the Hat of big
oil companies buying up the
UK oil independents is now
dear. It is not that such take-
overs would clash with its cor-
porate style, but simply that on
the -view of - oil prices
expounded yesterday the bid
«niwa do not begin to add up.
Shaft's dismal picture of 510 to
$20 nominal oft prices for years
ahead makes a disturbing con-
trast both with the bullish
views of the US oil majors, and
also with the market’s tacit
belief that prices will rise in
tire medium term, albeit gradu-
ally.
Even if everybody has once
casinos were in unusually bad
shape in first half 1987, but
they were in no less unusually
good shape in first half 1986.
And in any case, Pleasurama is
a substantially different com-
pany now than two years ago,
when its dependence on the
volatile casinos was far
greater.
The Pleasurama share price
comfortably ignored yester-
day’s badinage between the
two interested parties, in the
confident expectation that the
real news will come today with
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A test for Brazil’s
privatisation plains
The Brazilian Government has sow seven
«at»*owned companies since June 1887 and '
naa plans to sen a further 18 next year. But Ks
energetic privatisation policy win -be put fully to
the test today when Caraiba Metals, the copper
smelter with borrowings of about $2S0m, is put
up for sale by auction. “If we can privatise Car-
“!£*? we oan Private® aimost anything," one
official sard. Page 18
PollshMiipJtsmatqiNi
General Motors of the US has powered its way
to a dramatic financial recovery in Western
Europe in the last two years, -although losing
some market share. It is looking to the launch
today of the Opel Vectra/Vauxhall Cavalier, its ~
new mid-range model, to stop that decline and
seal Its position alongside Europe's big six vol-
ume car makers. Page 16
Statoi), Norway’s state oil company, has called
for a cash Injection of NfCrSbn ($429m) to allow
ft to sustain current operations and to raise Its
capital ratio, which has plunged to 10 per cent
due to lower on prices and budget problems
with the Mongstad refinery project Page 17
The beleaguered Austra-
lian coal industry is
waiting anxiously for two
key decisions in the next
few weeks which, it
hopes, will bring some
sorely heeded good
news. The outcome of
protracted negotiations
on steaming-coal con-
tracts with Japanese
utilities could lead to a
jump in prices after a
long period of weak-
ness, and a ruling Is to be given on a difficult
and costly labour dispute concerning more
flexible working practices. Page 82
SMm
in
hi
■
i
Northern Engineering Industries of the UK Is to
Ipcreas* Its dividend for the first time Jn fly®
years after announcing » 90 per cent advance
in firat-half pre-tax profits to £l&fin|.($9lm).
The powerrt|BtoQS~and ^nster^ft ^dllng ,
supplier saw its order-intake lnereaae 19 per
cent to £420m but lower turnover, laUing to
£32S.4m from reflected lower comple-
tions of major contracts. Pago 22
IM—d p r of H fr for JUMP
Despite betng West Ger-
many’s fifth biggeat
. chemicals company,
with sales this year likely to be between
0M8bn and DM9bn ($4.7bn). HOte is relatively
anonymous both at home arid abroad. To raise
its profile, the company has bought the chemi-
cals and plastics operations of Dynamit Nobel
of West Germany, has entered* Joint venture .
with Daleeti of Japan and plans various acqui-
sitions in North America. Page 17
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Catalyst Comma -
Catalyst Comma
Charms
Deere
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Evan* Hatohaw
Ex-Land* '.'
FsnwA eMPtionkai
Federated Housing
FtnaWer
GT Sutton
General Motors
HflGM
Henry Anabacher
18 Holmes* Merchant
18 Irish Distillers
« Johnnies
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18 NZ Electricity .
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Tootsie Roll
Untied Scientific
Wayne Kerr
Chief price changes yesterday
FINANCIAL TIMES
COMB\NIES & MARKETS
Wednesday August 24 1988
Collapse of the Hunt empire
Janet Bush on the legal battles which face the prominent Texan family
T he Hunt family of Dallas,
Texas, once among the
richest and most powerful
dynasties in America, has long
possessed all the hallmarks of
soap opera, yet its story outstrips
even the most extravagant of the
genre.
There was bigamy, interokdne '
rivalries ami wealth beyond the
wildest dreams. There was also a
potent mix of right-wing politics
and more than a touch of reft-
gams eccentricity. Finally, above
all. there was the fell fbom grace.
A Federal jury ruling in Man-
hattan last Saturday was the latr
eat, and possibly most deadly,
stage in the erosion of an em p ir e.
Based on evidence collected in
fly US and in' European
cities, the jury found three of the
most prominent Hunt brothers -
sons from the first marriage of
the legendary Texas all man; Mr
HX. Hunt - had co mmitte d
fraud wnd 'violated.
and anti-frost laws.
The jury concluded that the
brothers had conspired to comer
the world silver market between
late 1979 and early i960 with the
help of ptY imlTWlt. I n thItiwmiiiw i
dose to the Saudi Arabian royal
family. Also found liable oh Sat-
urday were Mr Mahmoud Fus-
tock, brother-in-law of Saadi
Aranda’s crown prince; and Inter-
national Metals Investment Co, a
Bermuda-based company trading
in silver futures, owned by Bun-
ker and Herbert Hunt and tiro
Arab *b«nrh« 1
Mr Nelson Banker' Hunt, con-
sidered the richest man in the
world in the 1860s with a fortune
estimated at ftfbn, and Mr Wil-
liam. Herbert Hunt, his more
down-home younger brother who
insists on. mowing his own lawn,
were also found guilty of violat-
ing dvil sections of the racketeer-
ing law. Mr Lamar Hunt, who
was always more interested in
professional sport and is the
owner of the Kansas City Chiefs
football team, was not c ha rged
with racketeering.
Saturday's judgment was the
fiat time the Bunts' liability has
been established for the extraor-
dinary p w n in in the silver mar-
ket when the price of the metal
rose from 99 to 960 an ounce and
then leQ all the way back down
again in a few months.
: The ruling is only the first of
several major court cases which
wfiJt attempt to win damages for
investors who claim losses' as" a
result of the Hunt brothers’
manipulation of the market
The award of hefty damages of
more than 9130m to Minpeco, a
mptnin marketing arm of the
Peruvian Government, seta a
dear precedent for payouts to
other investors.
Mr Herbert Deutsch of Deutsch
& Frey, the New York law firm,
will prosecute two major class
action suits against the Hants
and their co-defendants on behalf
of about 27,000 in v estors identi-
fied aa. befog active in the silver .
The Hunt brothers: (from left) William Herbert, T*winr
and Nelson Banker leaving a Manhattan coart last week
8Hver
$ per Thy ounce (London)
:
a ,V'
: .. - • •
. -
~ ~ ■ "• I
Jan 1 S 79
Jan fSBO
market during that period:
Mr Deutsch hopes the cases,
which will be base! on the same
evidence used in the Minpeco
case, will be heard in the late
autumn. These suits rfaim 9500m
in damages and widen the net
Mr Deutsch has named various
brokers which, he believes, evi-
dence will show financed the sa-
ver market conspiracy and took
an active part in -it They are
Morin Lynch & Co, Prudential
Bacbe Securities Inc, ACLI Inter-
national Commodity Services Inc,
Contlcammodity Services Inc and
Continental Grain Co.
A fter Saturday's ruling, Mr
Deutsch believes he has a
very strong case. “The
HmrtK nan no longer chant their
little mantra about not influenc-
ing the silver market They now
have to stand naked before the
world as having conspired
together," he said.
He charges that the brothers
.had endangered the financial fib-
ric of the US as well as markets
in London and Switzerland.
The sharp movements in the
silver price in late 1979 and early
1960 was not just a simple ques-
tion of volatility. It was of grave
concern to the US authorities,
not least Mr Paul Volcker, then'
chairman of the Federal Reserve
Board. He was concerned that so
modi of the world’s silver bullion
had falle n tutr> the hands of a
single group of people, rumoured
to be acting togriher.
Harry Hurt IQ, author of Texas
Rich, the defin itive biography of
the Hunt fondly, believes the rul-
ing in Manhattan has opened the
door to other law suits which wQl
cost the Hunts, who were esti-
mated to have lost more than
92bn from their silver play, a
great deal of money and lead to a
haemorrhaging of the empire,
already in considerable finanriai
disarray.
Placid OH and the brothers*
three trust estates, which own
Penrod Drilling, the. family’s
other big energy asset, are all in
bankruptcy under Chapter 11,
which allows a business to
restructure while protected from
its creditors. These troubled com-
panies are thought to tie up more
than half of the brothers’ wealth
and their reorganisation involves
substantial settlements.
- Mr Henry Simon, the lawyer
who is acting for Placid Ofl and
the three fruits, said they should
come out of bankruptcy in Sep-
tember as Chapter 11 proceedings
are wound up- He said the Man-
hattan court ruling related to the
brothers personally and should
not disrupt this process.
Court filings suggest the
brothers are now worth a net
911m, including trust real estate
investments, which may be diffi-
cult to divest, and personal assets
disclosed in judicial documents.
In 1980, their net worth was
about fSbn, excluding those real
estate holding s and ana of their
principal energy wimpanlas-
Mr Hurt said: "Daddy gave the
first family (ELL. Hunt’s children
by the first of three wives - the
first two at the same time) the
bulk of his fortune and the
brothers were always determined
Cambridge Electronic in US deal
By Andrew HtU in London
CAMBRIDGE' Electronic
Industries, which was floated off
by Philips, the Dutch electricals
arid electronics group. In 1981,
has returned to its parent to buy
two . US electronic component
businesses for a total of about
■954m in cash and shares.
The manufactur er of e lectronic
components and printed circuit
boards is also negotiating the
£9m (915.1m) cash purchase of
two European component compa-
nies from an unnamed seller,
thought to be Philips.
Mr JOhn J teka o n, cha irman of
the UK group and a ncm-execu-
tive d ir ec to r of Philips, said CEI
no longer wished to be dependent
on the UK market.
CEI is acquiring the Dialight
division and the switch and panel
operations of Philips’ Mepco/Cen-
tralab division for a premium of
about 94m over net asset value.
The move ahmild tnaw B M * CETs
annual sales tn the US from
about 925m to 9100m - just
under 30 per cent of the enlarged
group’s annual turnover — and
give CEI a sales base in the
Pacific basin, where it plans to
expand farther.
TO fund the latest acquisitions,
C3SI is placing 3-87m new ordi-
naiy share s, rep resenting about 9
per cent of CBTs enlarged capital,
with Philos’ US arm. The bat
anceof someSSS m wil l be paid in
cash, pushing up CETs negligible
gearing to about 50 per cent
CEI plans to offeet this by relo-
cating some of the US companies*
plant from gg p»ig it np sites, reduc-
ing costs and instituting other
measures to recover more than
915m.
The companies, which manu-
facture electronic switches, key-
boards and display panels, made
53.69m before .tax on sales of
979.5m in the year to December
31. but profit margins have been
declining for the last five years.
CEI said existing management
was unlikely to be replaced.
Earlier this month, CEI
announced a £4.7m agreed bid for
InfraRed Associates, a US-based
maker of infra-red detectors
which is quoted on the Unlisted
Securities Market in fli* UK.
- Yesterday, the group also
reported a 19 per cent increase in
interim pre-tax profits to £6.0lm
in the six months to June 30.
Shares in CEI fell 14p to 246p,
having risen in advance of the
interim results ann o imrarm^t
Kelly to resign as Beatrice chairman
By Deborah Hargrram In Chicago
tint Donald kelly, the
flamboyant chairman nf ftwt riw,,
.Jhe diversified food concern, is to
resign from the company he took
private in one of the largest
leveraged buyouts in US corpo-
rate history two years ago.
Mr Kelly, aged 65, wu remain
a "substantial' investor in the
company «»a wfll whiHiwm to sit
ouTthe Beatrice board after Us
resignation on October 1. He- will
harm over the reins to Mr Fred
Bentschler, jnesident and chief
executive officer. ...
Mr KeBy’fe decfstain ' ra nw ay —
Beatrice shifts its focus from
befog a hnMiny concern to a con-
sumer foods operating ww ip imy
Xh aTffing made to the Securities
end Fwbeng e - W
month. Beatrice said It had term!-
nated discussions on the sale of
its Trading nperatteg . compyiifl^
and on finding a buyer for the
wtede finur •
A com pan y. official said: "Now
tiwt we've tddfiedto being primdr
paUy an operating pompa--
nyi . . . that is not aa area: of
particular inteest to Don he feels
his role is not as crocEl as it was
before.’’
Store .Mr Kelly took Beatrice
private in a 96.2bn buyout -
with help from Kohlberg Kravis
Roberts, the New York invest-
ment firm - in 1966, be has bro-
ken .up tie company's food dM-
sfons and sold off more than. 97bn
in assets.
The company’s most recent
sales toclnde its Tropjcana Prod- .
nets division of fruit juices for
$U2bn and E-H Bbldtags, a mix of
nonfood and food specialty com-
panies, tor 9800m.
Known to rettah his rep u t ati on,
for dealntaking in the food indus-
try, Mr KeUy is unlikely to be
considering a quiet retirement.
He is rumoured to be onthft look-
out for another smaller acqnist
tion. but tire company says it
knows of- no farther plans of b!s_
Mr Kelly been indi-
rectly with Beatrice and its pre-
decessors store the 2950s. He was
Bsm ark, a company
which made Swift meats, peanut
butter and Playtex underwear,
when Beatrice took it over in
3981 He resigned to form his own
company.
A year later, he teamed up
with former Esmark executives,
j n^indmg Mr Bentschler, to nut
together a hid for Beatrice, which
Had been crippled by the depar-
ture of many of its top managers.
Mr Bentschler will use. his
strong operating experience to
nm the rump of Beatrice food
concerns, which include tomato
sauce products, popcorn, turkeys
and County- Line, one. of the
country ’ s largest cheese produc-
ers. The company says it plans
no significant changes as a result
of Mr Kelly’s departure.
Beatrices SEC filing said ' the
company planned to explore and
pursue various restructuring
alternatives, which might call for
the divestment of various other
assets from time to time.
Beatrice’s smaller divisions -
Southern Bakeries. International
Jensen, an audio equipment firm,
and Rusty Jones, an auto rust-
proofing and soundproofing divi-
sion - are likely candidates for
disposal in any restructuring.
KEY DATES
November 1974: HJ_ Hunt,
founder of the Hunt business
empire, dies, aged 85.
December 1979: Hunt family
and Arab partners amass dose
to 200m ounces of silver, worth
an estimated $&Bbn.
January 1980: silver prices hit
a peak d Just over 950loz.
March 1980: prices plummet
April 1980: Hunts say they lost
op to 91 tei on silver speculation.
March 1985: Hunt International
Resources flies for bankruptcy.
August 1986: Placid Off files
far b a nk ru p t cy.
1988-1987: various family trusts
file for bankruptcy.
July 1988: Hunts agree to give
creditor banks 50 par cent stake
In Penrod Drilling.
August 1988s Hunts ordered to
pay 9130m damages to
Minpeco.
Parts for vour car
Rhone-Poulenc
pays £30m for
ICI subsidiary
By Peter Marsh in London and George Graham in Paris
to prove that they were not just
inheritors of wealth bat business-
men in their awn right
"The cosmic historical irony is
that they have not only lost what
they made themselves but also
most of what they were given.”
Mr Hurt does not much Uke
the Hants, hat he still thinks,
they are being prosecuted for the
wrong crime. He believes their
vast accumulation of silver bul-
lion was not an attempt to comer
the market fin: profit
IMPERIAL Chemical Industries,
Britain's biggest chemicals com-
pany, is to sell its European sili-
cones business to Rhone-Poulenc,
the state-owned French group.
The acquisition by Rbone-Pou-
lenc, which is thought to have
cost it less than £30m (950.4m),
will strengthen the French com-
pany’s already strong position in
the £500m-a-year West European
market for silicones, which are
used in products such as emul-
sions, greases and sealants.
ICI said it had sold the busi-
ness as part of its policy of leav-
ing commercial areas where it
does not have a leading market
share. ICI’s sales of silicones
accounts for less than 5 per cent
of the European market.
Other European leaders in sili-
cones include Dow Chemical of
the US and a joint venture
between General Electric and
Union Carbide, also of the US.
The deal between Id and
Rhdne-Poolenc will mainly
involve an Id silicone plant at
Ardeer, Scotland, output from
which will be transferred to the
French company. The 90 ICI
employees concerned with sili-
cone production at this site will
remain on the company’s payroll
and in their present jobs for up to
two years, while Rhone-Poulenc
assumes responsibility for
Rh 6 ne -Poulenc will also take
over ICTs current sales support
operations for silicones. These
activities, based in Leatherhead,
Surrey, and Everberg, Belgium,
employ about 25 people.
The future for the Id employ-
ees concerned with silicone man-
ufacture at Ardeer - a large Id
site which employs a total of
about 2,000 people in various,
areas of industrial chemicals -
will be reviewed at a later stage.
At this point Shdne-Poulenc
could decide to integrate the
manufacturing of silicone at
Ardeer with other silicone pro-
duction operations in the rest of
the French group.
Rhdne-Poolenc has expanded
rapidly in recent years in sili-
cones, doubling output of certain
product Kn«>« at its Saint Rons
plant in France and bringing on
stream its first North American
sealants plant at Lakewood, New
Jersey, last year.
Rh6ne-Poulenc said yesterday
that the Id division would rein-
force its 1,500-strong silicone
product list with specialties such
as anti-foam and paper treatment
silicones, besides adding to its
geographic range.
Hongkong Bank lifts
payout after 19% rise
By Michael Marray in Hong Kong
T heir aim was much
broader and much more
arrogant. After extensive
interviews with the Hunt family,
Mr Hurt believes their silver play
was a hedge against the apoca-
lypse which they felt was immi-
nent The Shah of Iran had just
been deposed, the Soviet Union
bad invaded Af ghanistan, there
was hyper inflation and Jimmy
Carter was perceived as a danger-
ously weak President of the US.
Mr Bunker Hunt, a member «L
the richest family in Texas If not
America, along with representa^
lives of the richest family in the
world - the rulers of Saudi
Arabia - aimed at no less than a
return to a hard metal standard
to maintain the stability of the
western financial system.
’Their sin was erf arrogance,
beyond arrogance, for what they
were actually aiming for was a
realignment of the entire eco-
nomic system,” Mr Hurt said.
What they appear to have
achieved instead jg the decima-
tion of a fortune and the humilia-
tion of a dynasty.
HONGKONG and Shanghai
Banking Corporation, the colo-
ny's biggest bank which last year
acquired 149 pm* cent of Midland
Bank of the UK, yesterday
pushed up its interim dividend
following strong first-half profits.
After tax and transfers to inner
reserves, net profits for the first
half of 1988 rose to HKSL67bn
(US$214.6m), an increase of 18.6
per cent over the comparable
1987 period.
An interim dividend of 33 emits
per share has been declared, com-
pared with an adjusted 11 emits
last year. The directors expect to
pay at least 39 cents in total - an
effective increase of 13 per cent
over 1987.
The results were at the top end
of stock market expectations and
analysts said they underlined the
solid performances being seen
from the bank's various divisions
around the world.
In particular, they noted the
return to profitability of the
Marine Midland Bank in the US,
which became a wholly owned
subsidiary of thg HongkongBank
in September last year.
The six-month period also saw
the Midland Bank, the UK
clearer, make its first significant
contribu ti on to the group.
Mr william Purves, Hongkong-
Bank chairman, said the partner-
ship with the Midland Bank,
which recently announced
improved results, was already
bringing benefits to both parties.
He added that the transfer of
subsidiaries between the two
hanks would continue in the
coming months, and that by the
end of the year HongkongBank
would have transferred, sold or
closed its operations in continen-
tal Europe.
According to Mr Purves, the
Hongkong Bank of Canada pro-
duced an encouraging first-half
performance, and in the Middle
East results were mixed bnt
showed some improvement
Within Hong Kong, the bank-
ing sector enjoyed steady growth,
in profits helped by strong loan
demand. Last week, Hang SftOg
Bank, HongkongSank's 61 per
cent owned subsidiary, reported a
17 per cent increase in profits for
the first half.
t-y
l - , 'feroj3&y
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And when we put it down, we act East Your business is our bus i ness.
Currency options, interest rate swaps, forward me agreements —
whatever We stick with it and you always get an answer As for foreign
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FINANCIAL TIMES WEDNESDAY AUGUSTS*!'^
INTERNATIONAL COMPANIES AND FINANCE
Deere maintains ITootsie
profits recovery i $65m f<
By Matin Stanbrldgg In New York
THE RECOVERY at Deere, the
world's largest manufacturer
of farm equipment which also
and mitring machinery, contin-
ued In its third quarter.
Yesterday the
group reported a rise in net
profits to $ 81 ni, or $L 14 per
share for the three up
from $25J5m or S8 cents in the
sane period last year. Saiag
were *l93m ahead at $L39bn.
The improvement reflects
the slow emergence in the US
of the fann-eqtupment industry
from the ravages of a decade-
™ group said fire increase
in profitability was due primar-
ily to higher sales and produc-
tion volumes, some improve-
ment In the price of its
products and greater efficiency
In its worldwide operations.
The result was also substan-
tially better because of a strike
in the year-ago quarto:. How-
ever. the company added that
"higher prices of some raw
materials are partly offsetting
these improvements.”
Timiriiw to the final Quarter,
it said overall production was
scheduled to be 9 per cent
above the previous fourth
quarter.
North American and over-
seas production of agricultural
equipment would increase,
while output of lawn and
grounds care equipment
$l3l.66m. Sales advanced to
$&£8hn from £L82bn-
Investors reacted fa vourably
to the result and in early bail-
ing yesterday Deere’s shares,
rose $1 to $42%.
Apple decentralises
into four divisions
By Hodwrfefc Oram in New York
APPLE COMPUTER has
decentralised Its operations
into four autonomous divisions
so the company can better han-
dle its rapid growth.
Mr John ScuDey, who will
remain chairman and elitef
executive, is aiming for sales of
some SlObn by the early 1990a.
compared with $2.67bn last
year and analysts* estimates of
around * 4 hn this year.
Decision-making eras cen-
traHasd under lb Scultey when
lie became chief exec utive fa
1985 on the depart u re of Mr
Steven Jobs, one of Apple’s co-
founders.
That structure was consid-
ered appropriate at the time
because the personal computer
company was in disarray.
However, Apple’s subse-
quent recovery and rapid
growth in sales wa rra n t a more
tWihfa approach, the company
said.
The reorganisation is similar
to the one launched by Interna-
tional Business Machines, the
industry leader, in February.
Senior management gave the
heads of new divisjUms a great
deal of autonomy by IBM stan-
dards to try to increase their
responsiveness to trends in
technology markets.
The first of Apple's four new
divisions is Apple Products,
responsible for developing,
manufacturing and marketing
products.
Its president is Mr Jean-
Louis Gassde, former senior
vice-president for research,
development and marketing.
Apple USA win handle US
sales, service and support,
marketing to corporate cus-
tomers and the company's own
internal information systems.
Its president, Mr Allan
Loren, who joined the com-
pany only a year ago from
CIGNA, the US insurance
group, will have the key task
of broadening the appeal of
Apple's products to corporate
customers.
Apple Education and Pacific,
under Mr Delbert Yocam, for-
mer group chief executive offi-
cer, will cover sales and mar-
keting to educational
institutions and sales to all
types of users in the Pacific.
Although his duties have
narrowed, he retains responsi-
bility for the education market
which has been Apple’s mam-.
Apple Europe, under Mr
Michael SptacQer, former Euro-
pean senior vice-president, will
take on European sales, mar-
keting Htyi support. •
$65m for
Charms
By Deborah Har gr ea v es
in Chicago
TOOTSIE Ron Industries, the
Chicago-based maker of the
Infamous Tootsie Roll, one of
the best-known sweets In the
DS, plans to add more bite to
its chew with its planned pm
chase of New Jersey bubble
gum maker,
Tootsie, which has built It
fortune on (he Tootsie Soil, i
chocolate-flavoured chewy tof-
fee, will merge with privately
owned Charms by September.
r w™« Is best known for its
Blow Pop (bnhlile-gnnirceDtred
sweets with a hard taflee exte-
rior), which should appeal to
three to 13-year olds - Toot
ale’s core customers.
Tootsie, which te set on a
mqfor expansion drive, says
the deal to buy Charms, for
$65m in cash, will extend its
market share into bobble gum
and broaden its scope few
growth.
“We are a very famous com-
pany,” declares Ms EDon Gov
don. Tootsie’s president. “Ash.
any AnwHam what a Tootsie
Roll is and they will smile.”
That is, if they’re not too busy,
chewing.
The low-priced toffee roll
designed “to appeal to the kid
fa aU of us,” racked up sales of
some 9114m for Tootsie last
year on profits of The
confection has not changed
since it was produced in New
York in 1896 by Leo ffirsch-
field, an Austrian immigrant,
who named the roll after Ida
daughter. Tootsie.
But Tootsie Roll has tried to
hook into the adult market
with its acquisition One
years ago of CeQa Confection,
which manufactures a more
sophisticated chocolate-cov-
ered cherry product.
Tootsie is still ran as a
“Mom and Pop" operation, 1
with a husband and wife team
In the two top dots. It Is one
of few confectionery compa-
nies with its awn sugar refi-
nery and also runs its own
advertising agency and track-
ing company.
The 90-year did company
has been looking around Cor
an lyMdnw for some time.
“We’ve just become very
aggressive,” says Ms Gordon,
w does not rule out an other.
Mto at an acquisition fa the
GM in top gear for European challenge
Kerin Done on the US car maker’s plans for the new Opel Vectra/V anrhall Cavalier
G gwral Motes of the WIST nmOFMN CM MMHOT SHAMS . ZL35r rdnnta - *gton_h
IE, the world’s latest — — =-r r,.i.nrr.enr ~~
car maker, has Dow- *■*•• "here ' unaJuusaser ht West W
G eneral Motors of the
US, the world’s largest
car maker, has pow-
ered its way to a dramatic
flnanriMi recovery in West
Europe in the past two years.
ft has punffipsH s fl pie mar-
ket share in the process, how-
ever, and ft Is looking to the
launch of its new mid-range
car, the Opel Vectra/Vanxhall
Cavalier which it unveils
today, to arrest the decline and
secure its place among the Ug
six volume car makers jn West
Total mM
Rat
VoAswsgant
W »
FQnl 771/M
CM (OpWVnofialQ TIS^QS
there -
Soles •
Share ,
togjnereeste
%>
jkkJm w
- C%)
dmWtt (%1
«*u0
e^ne^oao
lean ;
. +5.1
ISA
mjm
1M
. +A0
14j6
Ml nno
1U
+1*
1Z7
7 vjns
11 A
+1«
114
' 771,000
ll^
+«
104
routs*-.
HU
+M -•
1ft 1.
mrepos
- ms
+2.1
cut location of to ft***
the UK, Anlwacp
mansgodto nddm * “SS
-financial, xwvery JFJSitK
Europe achieving ft *””*
iL*2Z** nraiiefon after sevoo
GaTs volume sales fa West
Europe, under the Opel badge
fa continental Europe and
under Vauxhall in the UK.
were at a record level fa the
first six months of the year at
718,300, but they have still
failed to keep pace with the
buoyant European car mar-
kets.
Hampered by lock of capac-
ity for some of Its products, not
least the small Opel Cor-
sa/Vanxhall Nova produced fa
Spain, and by- the ageing of its
present mid-range car, the
jpel Ascooa/Vammall Gsvaher
launched in 1981, the Opeft
Vauxhall share of the West
European car market fell to
108 par cent last year from 10.9
per cent in 196&
Its volume sales grew by 2.7
per cent, co m pared with a 6L3
per cent growth fa the market
Xn the first six months of this
year ft again lost some ground
peon market leaders, parties-
lady Flat of Italy and Peugeot
of France, but also to West
Germany's Volkswagen.
' The new Vectra/Cavalter Is
particularly crucial to Vaux-
bail's fortunes fa the UK. The
UK, with 100,000 units, and
West Germany, with 66,000
units, last year accounted for.
70 per cent of CM*s total Euro-
pean sates of the eodsttag mid-
range Cavafier/Ascona.
Especially fa those m arkets,
the new Vectra/Cavafier has a
big hole to fill as it repl a ces a
model which was Europe’s
best-selling mid-range car fa
r oft a 10B4 md 1985.
As the Ascona/CavaHar has
'aged. Us European sales have
gradually fallen from a peak of
357,722 units in 1982 ami
356^220 fa 1968 to 2S&500 last
year.
ft was the Cavalier’s high
level of acceptance fa the UK
fleet market which paved the
way far it to take over from the
Fold Cortina Hm* tnWafly
poariy received Ford Sacra as
the best-celling midrange car
fa the UK.
fa 1984 and 1985 It captured
more **>*” 26 per cent of its
segment fa the UK market,
■Suing more than 180JOOO each
year, and was only beaten into
second place overall by the
smaller Ford Escort.
Vauxhall is faring a mu ch
tougher market in this seg-
ment than at the beginning of
the decade, when than was a
paucity of new products, ft Is
stiR afadng to zu$afa riocie to a
quarter of that segment, how-
ever, with sales of 130,000 fore-
cast for 1989 fa a segment
expected to total around
560,000 fa the UBL
The conspicuous success of
the present Cavalier, which
helped to take VauxhaTTa over-
all share of the UK market to
more flam is per cent fa IBM
and 1966 front only &2 per cent
in 1980, has persuaded GM to
keep the CavaUer name tor the
new range fa the UK, while fa.
thereat of Europe ft has opted
to change to Vectra from the
Tice new CavaBertVectra is
-being launched by GM in both
saloon and hatchback versions
with a choice of petrol engines
from 14 faxes trf 1 j 6, L8 and SjO
litres as well as a top of the
Una high performance model,
the Vectra 2000/Cavalier GSI
2000 with a 16-valve DOHC
engtna, mod the powdbfltty of
four-wheel drive. The fours
wheel-drive system baa been
developed fa cckmeration with
Steyr-Daimte^Purii-
There will also be a 17 Htre
diesel engine version.
CM aims to meet Shnoet all
its UK demand for the new
Vectra/CavaUer from Its Luton
assembly plant, where two
years ago ft installed a £9Qm
($15l_2m)pafatsbop and has
quad s farther £3Qm on plant
and equipm ent.
Mr Louis Hughes, GM
Europe’s vice-president for
finance, says Luton Is the low-
tton. Vauxhall last year
in a net profit of
net loss of £fiL7m fa
was the
and only the fourth time the
company had avoided ton fa
^^“SmSwMMwy* the co ®*
pony to on fts way this
equalling tost yeart record
taxnch wffl sustain the finan-
cial recovery. . , a
It is bring In” 8 ***” into a
fiercely competitive market,
however, andtherehave
already been warnings th at fts
arrival fa the Buroprommarto^
place. and particnJIariy fa the
tjK market, could toad to a
renewed bout of “disorderly
marketing,’* as producers use
incentives and discounting to
h fij d on to market share. Ford,
for one, will not eaaDy mnxea-
der tbs eegment market leader-
ship, wfaefc its Sfena has won
toEurope.
Management to buy Lear
Siegler unit for $500m
CIGNA sells arm for $500m
By Otar New York Stall
THE MANAGEMENT of Lear
Stagier Seating, the Michigan-
based car and lorry seat mak-
ing subsidiary of Lear Stagier
Holdings, the PS conglomerate,
is to buy out the offshoot for
6600m.
The announcement was
made jointly with Forstmann
Little, the leveraged buyout
specialist which put the deal
together, and Kidder Peabody,
the Investment banking group
which Is Joining the manage-
ment team and financing the
deaL
Mr Kenneth Way. Lear Sta-
gier Seating vice-president,
who will be the new company’s .
chairman, said the deal would
provide capital to invest In
new plants and develop new'
products.
“Acquisitions that comple- ,
ment the company's exist-
ing ... business wffl also be
part of our fangtenn strategic j
plan,” he added. j
Lear Siegler Holding went
private fa a s&lbn leveraged
buyout which was put together
by FaEstxnann Little early last
year.
Kidder said it had committed
debt and equity financing to
the unit’s management group
while Manufacturers Hanover,
the big US banking groups had
committed to provide senior
loan facilities.
By Our Now York Stall
CIGNA, a leading
shareholder-owned US insurer,
has sold its Horace Mann
insurance division for $500m
cash to complete the refocus-
ing of Its efforts on corporate
wttiwr than individual policy
holders.
The purchaser of the Hfittr
debased subsidiary is a new
company formed by Gibbons,
Green, van Amerongen. a New
York management buyout spe-
cialist. Shareholders in the
new venture Include Mir Paul
Kardos, Mann’s president, and
other awrinr executives.
CIGNA put Horace Mann
and its Individual Insurance
Products divtefam cm the block
tost Angnst as part of a strate-
gic switch to corpoadecuBtoin’
era. It has retained, however, a
small property-casualty busi-
ness for individual clients
within its Connecticut General
operations.
InterContinental Ufa, a New
Jersey-baaed insurer, earlier
agreed fa principle to boy the
latter operation for $L4Dm. The
sale, of Horace Maim, however;
has proceeded more slowly,
partly because the insurance
fadnstxy had a large number of
operations .far sale at the time
of tost October’s stock market
crash. The volume and value of
In wn n iiH* takeovers has since
recovered. . .
CIGNA "seems to have got a
fair price of about one-an&a-
baU times book value" for Hor-
ace Mann, said Ms June Hotter,
an analyst with Pruden-
ttal-Bache fa New York.
Horace Mann, founded fa
1945 toad named after a US pub-
lic rifacation. pioneer, sails per-
sonal Hfe, car and home-
owners* insurance to
fadhdAimls ««i groups, partic-
ularly those invxavBdin educa-
tion. It has assets of about
SSm, revenues last year of
6721» a and had a book vahm of
8840m on June 80.
Gibbons, (heap, which made
an abortiv e attempt at a man-
agement b uyout test year at
Argonaut, a West Coast
insurer, has completed 26 buy-
outs fa its 19 years of
m en ti ons. The Horace Mmw>
deal was undertaken by its Los
Angelas office. -
NewJssue
AH these securities having been sold, (ha annoiawcment appears as a matter of record only.
July, 1988
4
BEST DENKI CO., LTD.
(Kabushiki Kctisha Best Denki)
(, Incorporated under the lam of Japan)
U.S. $200,000,000
4% PER CENT. NOTES DUE 1993 WITH WARRANTS TO SUBSCRIBE
FOR SHARES OF COMMON STOCK OF BEST DENKI CO., LTD.
ISSUE PRICE 100 PER CENT.
The Nikko Securities Co-, (Europe) Lid,
Credit Suisse First Boston Limited Dahva Bank (Capital Management) limited
Daiwa Europe Limited
Bank of Tokyo Capita) Markets Group Barclays de Zoete Wedd Limited
Choo Tfrnst I nftrartHwral limited Credit CfHiimerdal^ France
Dainchi Europe Limited Deutsche Bank Capital Markets Uoiited
Robert Fleming &C^. limited KleiilWOitBe»S0aiilldted
Merrill Lynch IntarnriKmal & Co. MStsraTkristliiteriiatiQgi^
MorfflQ St alky Tntemaiifgial New Japan Securities Em'ope limited
ganya Tiyfa rn a«wi«al limited Sanyo loterpatkwMd limited
SBOSwhsBffi^ Corporation J. Henry Schroder Wagg & Co. Limited
Tokai Inte m fl tkma lj imte l
Securities Co. (Etmipe)L^ S. G. Warburg Securities
WestdeutscheLanderiiffiriKGirozentrale
Al
British Airway 8 Pic
KIM Royal Dutch Airlines
Swissair Swiss Air Transport Company Ltd.
(collectively the “European ConsorUnm 1 *)
USAir Group Inc.
through subsidiaries have acquired a 19.9% interest in
Couia Partnership
from
United Air Lines, Inc.
The undersigned atied ax financial admeor to the
European Consortium in this transaction.
MORGAN STANLEY & CO.
Augusts, 1988
.Sfr iiwa International Limited
SBCI Swiss Bank Corporation
17
FINANCIAL TIMES WEDNESDAY AUGUST 24 i988
INTERNATIONAL COMPANIES AND FINANCE
^ 'HU
1 *;i?»
*■*■...* I-v
•- r* -I* '*£•
' ' Rj... --*■
■ m *
». * * I*.*
*•'.*• •«
- -
«*\jw : •
r i^A
- «SL ^
• ’ .^r. f ^ ;
.. t.
• • . -. r .
.-ar'ey
00m
’*■ e.-* v.
- va -r
l.ti
Huls looks for a higher profile
Peter Marsh on the aims of Germany’s fifth largest chemical group
E ither in West Germany prospects for the rest of the presence. Group sales in the mainl y accounted f or by spi
or outside, the -name year and '-1989. Beyond * hi”, US .this year are likely to be dalty plastics used in eng;
Hals meets with A hknlr lMWAmr . Mr. RrlnVmanin ia Ahnnt t4Rflm. or dnilhle the neerine’ and other nmdnet
E ither in West Germany
or outside, the -name
Hflls. meets with a blank
stare from most people. Ur
Horst Brinkmann, board mem-
ber for Germany's fifth biggest
c h e m icals company, says thi«
sometimes bothers him wnd
other managers at the group.
Ur B rinkmann and Me col-
leagues are, however, doing
then- best to raise the profile of
t heir company, if not among:
the public then in the interna-
tional industrial community.
Last year “the company
splashed out DMlbn ($521m)
for the chemicals and pisstics
operations of Dynamit Nobel,
another Ger man chemicals
concern. The transaction,
which involved Hflls paying
DM4SQm in cash as well as tak-
ing over debts and other finan-
cial commitments,' increased
the ■ group's turnover by
roughly 40 per cent and added
9,000 employees to make a total
payroll of 24410a ...
Sales this year are likely to
be between DUSbn and DM9bn_
The figure is only narrowly
behind the sales nf Huniwi, the
fourth biggest German chemi-
cals company, although it
trails by a wide margin the
sales of the three German
chemicals giants, Hoechst,
BASF and Bayer.
To put the activities of HfUs
in context — and also to illus-
trate the strength in depth of
the German -chemicals busi-
ness - the company’s turn-
over is bigger than that of any
British chemicals concern
except Imperial Chemical
Industries.
Htlls, which has benefited in
the last year or so both from
the strength of the German
economy and the healthy
dgrmmri in Europe far chemi-
cals, is optimistic about the
prospects for the rest of the
year and -1989. Beyond this,
however, Mr Brinkmann is
more- cautious. “After 1989,
there could be asl ow dow n On
demand),’* he warns.
The relative anonymity of
Htlls is . partly explained by Its .
being owned by Veba, the huge
West German energy and
chemicals conglomerate.
Veka's breadth of activities
and total turnover of around
DM40bn tend to obscure the
operations of its subsidiaries. ;
Another reason is that Bills,
unlike many other chemicals
companies, sells few' products
that would be recognisable -to
the average person other than
those employed in fine chemi-
cals, business. Host of fbe L500
dtifergnt items which it wiAm
- the list includes a huge vari--
ety of det e rge n t i nte r m e dia tes,
plasticisers, rubber products,
solvents and: surface coatings
- end up as. components
Within goods mimufarfairHl by
other companies.
Besides these products, Hflls,
based on a sprawling site, at
Marl, in the industrial , heart-
land of the Ruhr district, is
also n 'ji HimiMpttf manufac-
turer of polyvinyl chloride and
polystyrene, two bulk plastics.'
If Hills is little known in
Europe, this is still more the
case outside the continent
where, before the Dynamit
Nobel acquisition, the com-
pany gained a mere 12 per cent
of its sales. The position has
chang ed slightly , with pro-
portion hkely to increase to 15
per cent this year, against 50
per cent for the proportion of
sales in Germany and .-35 per
cent for the rest of -Europe.
The takeover baa particu-
larly helped Hflls 1 US
operations, where Dynamit
Nobel had a reasonably strong
presence. Group sales in the
US .this year are likely to be
about 5450m, or. double the
pre-acquisition figure.
The company, with a base m
New Jersey, has 500 employees
in the US. It is particularly
Hog sfrB rinfcm am i: cautions
about future demand
S n that country as a
of special chemicals
give plastics different
colours, items used especially
in the motor industry.
Mr nrinkmarm gays TTflla Is
keen to grow further in the US,
and is considering various
other acquisitions. This is
partly, he says, because of the
general need to expand over-
seas in order to smooth out
currency fluctuations affecting
its financial results and also to
“pick up an the technological
Inno vations'* emanating from
the US market '
Another target for expansion
is Japan, where Hflls has a 50
per cent-owned joint venture
with DateeQ, a Japanese chemi-
cal company. Ibe joint venture
last year had sales of DMSOm,
mainly accounted for by spe-
. dalty plastics used in engi-
neering and other products
such as isocyanates.
Among the more interesting
products brought into the
group by the Dynamit Nobel
purchase are a series of sili-
con-based chemicals. Unlike
most- of Hflls’ products, these
items are derived not from
hydrocarbons but from miner-
als in the shape of sand. “They
give ns a nicely growing range
of products and reduce our
dependence on oil,” says Mr
R ritikmami
The purchase has also
strengthened Hflls* position in
the area of fine chemicals and
has taken It for the first time
into the processing of finished
plas tics parts.
As for the immediate future,
Hflls is doing its bit to keep up
the generally high levels of
chemicals industry investment
in Europe. Its spending of
DM50Qm this year on capital
projects is more than double
the company's figure for 1986.
Hflls is abstracting at Mari
a DMisOm plant for manufac-
turing a cry he and acrylic
esters, important chemical
intermediates, and is even
talking about reopening a
mothballed ethylene cracker
which it operates jointly with
Veba subsidiary.
The recommisioning of the
cracker, which is at Gelsenkir-
chen, also in the Ruhr area,
could add to the supplies in
Europe of ethylene, which is
used as a basic feedstock to
make a host of chemical prod-
ucts. Demand for the substance
in Europe has been growing
steeply in the past few years.
The company stresses, how-
ever, that the decisions over
reopening the plant are still
some way from being taken-
Statoil seeks NKr3bn state cash injection
By Karan Fossil in Stavanger
THE DEPTH of the. :
problems at Statoil. Norway's
state oil company, was unto- 1
lined this week when it called <
for a state cash injection of at
least NKrSbn 9429m) to allow ]
it to sustain operations on 1
their current scale. i
Statoil also wants the money
to raise its equity capital ratio,
which has plunged to 10 per
cent By contrast the majority
of the international all compa- <
nies operate with equity of.
between 50 and. 60 per cent of i
total capital.
Mr Herald Narvik, Statofl's
chief executive, said on Mon-
day that the. state oil compa-
ny’s level of capital ratio has
plunged to 10 per cent because
of dl prices, which have taken
a downward turn, and budget
problems with the Mongstad
refinery project
A major budget overspend of
NKiOSbn in the Mongstad proj-
ect will force Statoil to make'
write-offs against accounts for
the next two to three years. In
1987 accounts Statoil made
write-offs of NKr3-3bn and was
forced to omit its dividend pay-
ment to the state.
Statoil told Mr Arne Oefen,
Norway’s OH and Energy Min-
ister, in a confidential meeting
on Monday, that existing state
guarantees are the only mwmn
of support allowing it to
finance its current operations.
* Statoil has set itself a goal of
maintaining a capital ratio
level of 25 per emit, although
since its inception in 1972, it
■ - n .---v*-. . __l - • .
Johannesburg
Consolidated
Investment
Company, Limited
Qncotporaiad in thn BnpaHic ofSoath Abies— Rag. No. 01/00429/06)
Highlights from the
Consolidated Financial Statements
For the Year Ended 30 June 1988.
(Unaudited)
3
Prom before taxation
Profit attribu ta ble to
ordinary shareholders
Ordinary dividends
Earnings per share
Dividend per share
1988
1987
Ban's
Rm's
359 JS
3325
323.8
2685
129.9
110.6
4 392 cent* 3641 cents
1750 cents 1500 cents
Tlw aimuM report and Chairmaa’sieview wffl be posted to membois on or about
26 September 1988.
A Final Dividend (No, 125) of 1 150 cents per share has been declared payable to
shareholders registered on 16 September 1988. Date of payment will be 17 October
1988. < Currency conversion date3 October 1988). Holders of share warrants tobearer
should attend to the temtsofanotice lobe published on cr abouc4 October 1988.
LondonJEGSMSXE.
23 August 1988
Union Bank of Norway
U.S. $50,000,000
Floating Rate Notes due 1999
nokc .k
has only managed to achieve a?
ratio of between 15 per cent to
16 per cent
Two options to solve Stat-
ofl’s financial dims are soon to
be discussed by the Storting
(parliament). The first calls for.
the Government to accept a
lower dividend payment
The second calls for the con-
version of a loan, by the Gov-
ernment to Statoil, to share
capital The amount of an ini-
tial loan under discussion is- 1
between NKx2bn and NKrSbn. j
Finnish insurer,
"plans another
rights Issue
By OIU Vtrtanen in Helsinki
SAMPO, the Finnish insurance
group, plans to raise FM975m
9220m} through a one-for-two
rights issue which will
increase its share ra p ftp ] by 48
per cent to EMlSSm.
The Issue price is FM325,
which compares with the latest
quote of FM520 on the Helsinki
Stock Exchange. The subscrip-
tion period is October 17
November 18.
The issue follows a similar
rights issue in which Sampo-
raised FM763m in May this
year. The issue was heavily
oversubscribed, and this, says
Mr Kalevi Pihlaja, managing
director, was one of the main
reaso ns for the second issue ,
within six months.
Sampo cha ng ed it s status
from a mutual insurance com-
pany a year ago by issuing a
total of 750,000 shares to all its
policyholders. It' was subse-
quently listed on the Helsinki
exchange. The new shares will
not be available to foreign
investors due to a proposed
law that would cut maximum
foreign ownership in Finnish
insurance companies to 40 per
cent of the equity and votes.
According to the current law
all shares in Finnish insurance
companies are available to for-
eigners.
Sampo retains a unique vot-
ing structure, according to
which each shareholder has
only one vote irrespective of
the number of shares held.
Ascom Holding
pays same
By John Wicks in Zurich
ASCOM HOLDING, the Swiss
telecommunications concern,
is to propose unchanged divi-
dends for 1967-88 of SFr60 pec
share of SFrJSOO nominal value
and SFrl2 per share and partic-
ipation certificate of SFrlOO
nflminni value — nn increased
equity capital.
Parent com p a ny net profits
for the year, ended on June 30.
were SFxSfiJim (JXSJhn), but
are not comparable with those
for the previous 12-month
period.
Mentor Corporation, Sana Bar-
ban. Cals form*. 1988 Annual
Report, mdoding accounts and
auditor'* suiemni. may be
obtained, without char g e , during
normal business boon, at the
office* oT:
J. Bcmy SeMer Cm. jjJ
mChnyAk.lmim BC2M&
Second big
shake-up at
Den norske
By Our Oslo
Correspondent
DEN NORSES CREDITS ANK
(DnC), the troubled Norwegian
commercial bank, yesterday
announced a radical restruct-
uring of the bank Into four
main divisions
The move comes less than a
year after a big shake-up of
top management following
NKrLSbn (S2l4m) in losses for
1987 on loans and securities.
The bank was previously
organised into five divisions*
DnC will now incorporate the
shipping, petroleum and off-
shore division into the indus-
trial corpor a te division under
the lrarioraTifp of Mr Pqy plH
Amkvaern.
The banking division is to
be led by Mr Nils Landsnes, 43,
the current managing director
of Norwegian Contractors, a
supplier to the offshore oil
industry. His appointment
brings with it the title of dep-
uty manag in g director.
Mr Lars Uno Thnlin, deputy
managing director and the
current head of DnC London,
Is to head the bank's interna-
tional division from next year.
Mr Eskil Vogt, 45, former
general manager of Christi-
ania Rank, one of DnC’s major
competitors, is to head DnC’s
investment banking division.
Notice to Bondholders o*
ESKOM
(formally Known as ESCOM)
Sandlin (Transvaal),
RapubSc of South Africa
U.& swogMMHno
tM par com. Bonds due 1931
Notice is hereby given that:
1. Effective 1st November; 1987.
ESCOM has changed its name to
ESKOM.
2. The above mentioned Bonds wifl
' continue to be listed on the
Luxembourg Stock Exchange
under the former name of
ESCOM tallowed by the new
name of ESKOM. Each new
notice to Bondholders wffl con-
tain both names.
3. The Bonds wfll not be stamped
nor exchanged for new bonds.
4. A legal notice, as well as the
amendments to the statutory
documents, wiB be filed with the
Chief Registrar of the District
Court of Luxembourg.
LM0M DE MMQ0CS OKI (UUaBOMM)
SOCtflt MOKYME
DEACON MORGAN McEWEN EASSON LIMITED
Robert Sclater
is pleased to announce the opening of its
United Kingdom and European office
Suite 301, Guild House
36 -38 Fenchurch Street
London, England
EC3M 3DQ
Tel: 929-5614/18
Fax: 929-5451
Telex: 916 940 (Deacon G)
Maynard Marceau, Managing Director
Nicholas Powell
Mark MacLean
Deacon Morgan McEwen Easson Limited is a Canadian international investment dealer
specializing in institutional and private client services. The Company prides itself on its
independence, quality of research and financial strength.
Toronto, Montreal, Vancouver, Hamilton, Victoria
London, England - Sydney, Australia
Members of Toronto Stock Exchange, Montreal Exchange,
The investment Dealers Association of Canada and The Securities Association (U.K..)
US $300,000,000
Scot ia bank S
THE BANK OF NOVA SCOTIA
Floating Rate Subordinated
Capital Debentures Due 2085
Interest Rata 9Vfe% per annum
Interest Period 24th August 1988
24th February 1989
Interest Amount due
24th February 1989
per US. $ 10,000 Debenture U.S. $ 466.39
per US. $100,000 Debenture U.S, 54,663.90'
Credit Suisse First Boston Limited
Agent Bank
HMC MORTGAGE
NOTES 2 PLC
£175,000,000
Class A
£14,000,000
Class B
Mortgage Backed
Floating Rate Notes
Due February 2015
For the interest period 23rd
August. 1988 lo 23rd November.
1988 Lbe Oats A Nows will bear
imetcsl af 1102188% per annum.
Interest payable on 23rd
November. 1988 will amount to
£33121 .89 per £100000 Note.
The Class B Notes will bear
interest al 13.02188% per annum.
Interest payable on 23rd
November.1988 will amount to
£45805632 per £14.000.000
principal amount.
Agent Bank:
Morgan Guaranty Trot
Company of New York
London
This announcement appears as a matter of record only.
New Issue
22nd August, 1988
Bergen Bank A/S
(Incorporated in the Kingdom of Norway with limited liability)
¥5,000,000,000
4 7 4 per cent. Notes Due 1993
Issue Price 101% per cent.
Yamatchi International (Europe) Limited Chuo Trust International Limited
Bergen Bank A/S
18
FINANCIAL TIMES WEDNESDAY AUGUST 24
1988
INTERNATIONAL CAPITAL MARKETS AND COMPANIES
Australia relaxes banking regulations
the AUSTRALIAN
Government, in a move long
sought by ths flnandal sector!
has announced a dual reform
to the mgnUtiomi nfft wiiny thr'
cwutry's banks, writes Chris
Sherwdl in Sydney.
The changrx remove the out-
dated distinction between
trading end savings banks,
and reduce the amou nt ftm**
are required to place as low-in-
terest deposits with the cen-
tral bank.
Hr Paul Keating, toe federal
Treasurer, announced the
changes in his «wn»i budget,’
and said they were “sweeping
away the last significant de-
ments of unnecessary regula-
tion hi the fiMiMfai arena."
He said they would enhan c e
the efficiency of the banks,
remove distortions in the allo-
cation of financial resources to
particular sectors of the econ-
omy, and exert downward
pressure on interest rates.
Ihe change to the Statutory
Reserve Deposits system
’m«nw trading will no
longer have to maintain 7 per
cant of their Australian dollar
deposits with the Reserve
Bank, where they receive only
S per cent interest.
But once these deposits are
phased out, over a three-year
period, the banks win have to
keep some low-interest depos-
its with the Reserve Bank.
These will amount to 1 per
cent of total HaMIittes exclu-
ding shareholders’ tends.
Budget documents indicate
that this smaller deposit on a
larger base would result In an
effective halving of the current
impost on the The Gov-
ernment atdd the bank* had
assured It that the benefits of
the change would be reflected
in their interest rates.
On the distinction between
trading and savings banks, the
Government's removal of fth
simply acknowledges that the
two exist only as different sets
Of aCCOUBts within hawking
groups rather titan as distinct
structures.
In a statement .yesterday,
the Treasury sought to allay
fears about any impact on
bousing loans by pointing out
that lending for housing
would continue to be very
attractive for banks.
Reserve Bank revises capital rules
By Chris Shantou In Sydney
THE RESERVE Bank Of
Australia, the country’s central
bank, yesterday issued new
guidelines for the risk-based
measurement of the capital
adequacy of Australian banka.
The guidelines are said to be
consistent hi all substantial
respects with those of the
supervisors' group at the Bank
of International Settlements In
But "special features of Aus-
tralian banking” have also
been taken into account
In particular there are some
changes to the proposals first
put up in a Reserve Bank dis-
cussion paper in January.
These prompted considerable
flfac n Bgin n at thp thru* and cm>
tain objections have been
incorporated Into the new
guidelines.
As expected the Reserve
Bank, in replacing its existing
re q uirement that hnnim main-
tain a certain ratio of capital to
total assets, has stood by the
minimum capital i tlBBlrfl
agreed by the Basle group.
Thus, *»idi Australian bank
will be expected to have a ratio
of capital to risk-weighted
assets of not less than 8 per
cent, with at least 4 per cent In
“core capital "
Gore capital, also known as
Tier 1 capital, includes paid-up
shares, general reserves,
retained earnings and rum-cu-
mulative irredeemable prefer-
ence « 1 wi i pt | and {g gg flrigj-
nally defined.
But the remaining supple-
mentary or Tier 2 capital,
which Includes asset revalua-
tion reserves, convertible notes
and perpetual subordinated
debt, has been expanded to
frw-Vndo redeemable
shares and term subordinated
debt. This latter category of
capital, however, is not to
exceed 50 per cent of core capi-
tal.
As for the weightings
accorded to different assets,
the Reserve Bank has retained
three broad types of credit
exposure - to governments,
’banks all others - and
five cat e g o ries of risk weights
- zero, 10, 20, 50 and 100 per
cent.
similarly off-balance sheet
transactions are still to be con-
verted to balance sheet equiva-
lents, and there are stffl four
categories of equivalents -
100, 50, 20 and zero par cent.
However, the Reserve Bank
has mate certain key adjust
Tfrynfo to Its m-i ghtal proposals.
In particular:
• flbrima fin gfy ra v ra nwn ta
piuM HiiMw t entitiw! and
Incorporated in OECD coun-
tries are to have the same
Weight as clntmg oil rfmflar
domestic bodies.
• cn trims on banks incorpo-
rated in Australia and on
banks incorporated in OECD
countries will now have a sin-
gle wright of 20 per cent,
whether the rinimw have a
maturity of up to ox* year or
beyond one year.
• The Bank says these stan-
dards can be extended on a-
case-by-case basis within the
Asia-Pacific area as well, “con-
sfeteratian bring given to inter-
national standing and the pru-
dential supervis o ry regime of
the parent country.” An obvi-
ous would be Singa-
pore.
• Claims on bor ro wers other
than gn ra rnmgntg or Innbt,
which are guaranteed by a gov-
ernment or bank, are generally
to carry the weight appropriate
for the guarantor. *
• The Reserve Bank has also
simplified the weights allo-
cated to Hahns on govern-
ments. And it has extended the
50 per cent weight far loans
fully secured by mortgages on
residential homing, so that it |
now applies to loans for rental
housing as well as owner occu-
pied frpmriwg -
Johnnies to lift payout
By Jbn Jonas in Johannesburg
STRONG PROFITS are
reported by Johannesburg Con-
solidated Investment Company
for the year to June and the
group pimm to lift its dividend
from R15 a share to R17.5Q.
Kamhtg g from gold, plati-
num and ftfamnm! tiw w ifa iimtii
were sharply higher, although
the imp r ov e me nt was partially
offset by greater expenditure
on exploration and lower foe
iwHitii# from nwm paniwa man-
aged by the mining house.
Investment income was
enhanced by special dividends
di stri b ut ed by the Rand fonte tn
Es t a tes gnld mftw and Rnsten-
b ur g Platinum and increased
toR27L7m (KLO&Tm) from the
previous year’s Rl91.2m.
Overall the group’s pre-tax
profit rose to R350.5m from
K3328m. After reduced tax, net
profits increased to R325.7m
from R274£m to leave per
share earnings standing at R44.
« gnhwt R36 a year earner.
Mr Vaughan Bray, a direc-
tor, says the outlook for the
group's mining companies Is
brighter Sum a year ago
expects group earnings this
year to be at least maintained-
Ashton Mining in reverse
By Our Financial Stall
ASHTON MINING, the
Australian diamond producer,
reports a 42 per cent decline in
net profits for the first half of
1388 with trading hit by cur-
rency factors and fluctuations
in diamond shipment timings.
Equity-accounted net profit
fell to A$R9m (USSS.7m) from
AH2m in the first half of 1987
on sales which declined by 5
per cent to AttO&n.
Ashton, which is 46 pm* emit
owned by Malaysia Mining
Corporation, st ressed that tim-
ing and volume differences in
diamond sales made firsthalf
ear nln gS mnip a r wmM dHWwilt-
It said full-year net profit
would be in it™ with 1987*s
Af2&3m.
As in previous reporting |
periods Ashton declared no
dividend «nd paid no tax.
The company's main asset is
a 38 per cent stake in the
Argyle diamond mine In West
Mi'ii AimtraHw
Six-month output fell to
15.9m carats from l&Sm. Ash-
ton’s share foil to 4.4m carats
from 4.9m, but during the
period selling prices Improved
considerably.
This announcement appears as a matter of record onty.
June 1988
Gulf Canada Resources Limited
U.S. $375,000,000
Note Issuance Facility
Arranged by:
Bank of America International Limited
Lead Managed by:
Brazilian
smelter on
the auction
block
By John Barham
in Sao Paulo
PRIVATISATION is rapidly
becoming a. buzz word among
Brazilian bankers. Since June
1987. the Gove rnm ent has arid
seven, state-owned companies
for 5287m. B {dans to sell eight '
more by the end of the year
and a further 18 companies are
scheduled for Side in 196ft.
Tbe most immediate privati-
sation test for the Government
takes place today when the
state auctioneer will attempt to
-sell one of Brazil’s whitest ele-
phants - the copper smelter,
Cmriba Metals - to the high-
est: bidder. The auction, baa a
reserve price of US$67m. .
Cara flba wa s the brainchild
of Mr Francisco Pignatari, an
eccentric millionaire who
dreamt of making Brazil self
sufficient in copper. But Bra-
zil’s comer reserves are tiny
by world standards and the
project folded in 1974. Soon
after, Caraiba. moved under the
Sta te T npbrrila.
Now, 14 years and gLSbn of
taxpayers' money later, the
Government has derided to put
Caraiba back into the private
sector. The company comes
with borrowings of around
S250m but a number of today's
bidders have publicly
. expressed their conviction that
Caraiba can be made profit-
able.
The task will not he easy. As
one government official said
recently: “Few state companies
approach the foDy of Caraiba.
IT we can privatise Caraiba, we
can privatise almost any-
thing.”
Amour the 26 state compa-
nies to be sold between now
and the mil of next year are a
aaWtinw of steel mills. three
railway operations, a petro-
chemical company, a computer
company, fertiliser plants and
a luel distribution network.
Many of the companies are
deeply in debt and have a repu-
tation for poor management.
Mr Sergio Zendrun, a senior
gove rn ment official, illustrates
the . urgency of the privatisa-
tion programme by stre w in g
the chronic imbalances within
the Brazilian economy.
The private sector, he says,
has little debL it exports, it
generates profits and'zs liquid.
In contrast the pubhc seetor is
all bnt Insolvent. ’staggering
under, the weight m some
tlTObn in domestic exter-
nal* debt. *Equfl£brhnn can
only be restored by a migration
* of Amotions to the private aeo*
tor,” says Mr Zendnm. "•
According to bankers, the
private sector should have no
trouble absorbing the state dis-
posals. Under the present
schedule some f2bn looks set
to change hands this year and
next This is a relatively puny
amount when set alongside the
|70bn or so of short-term
money market Instruments
which the Treasury has bor-
rowed from the private inves-
tors.
Yet businessmen are suspi-
cious. Government claims
' about -the attractions of state-
owned companies have raised
many local eyebrows. Political
doubts have also been aired.
Mr Eduardo da Rocha Azevedo,
president of the Sao Paulo
Stock Exchange, says privati-
sation could bestow monopoly
power o n a sm all number of
■ powerful Investors.
And some politicians are
actively obstructing the priva-
tisation programme. In Brazil,
state companies have long
been vital levers of political
influence. Yet time and public
funds are now rapidly r nim fa ig
ant
Dollar issues rise after
encouraging US data
By Our EwuHMi r fc Bte Staff :
BETTER TRAN expec te d US
inflati o n data for July sent a
modest wave of relief through
the dollar bond markets,
which, when combined with
the effects of an apparently
Irrepressible dollar,: boosted
Treasuries and propped up
prices on Eurodollar bonds.
The US Commerce Deport
mmt said that the key c oa-
smner price index rose ql§ per
cent in July; sHghfiy Jess tun
had been expected- But once
food and energy prices were
removed from the calculations,
the rise was an even more
modest 0.3 per cent, down
slightly from the month before.
While the news proved
mostly beneficial for long*,
d ated dollar paper, short -tern
issues, which constitute the
bulk of the Eurobond market
were up about ft points.
The US Inflation data aided
D-Mark Issues, with .domestic -
Bunds paring the day's losses
to 16 basis paints at the long
rod from 85 basis points eariter
in the day. D-Mark Eurobonds^
meanwhile, ended the day-
slightly firmer, with gains of 10
to 20 basis points.
The fafinre of tile Bundes-
bank to raise its key repur-
chase ag re e men t rate as many
had expected, also helped senti-
funds oh virtually identical
IBJ Finance Co. KV issued a
faOQm 4-year issue with a cou-
pon of 9% per cent and priced
at 101.45 to yield 53 basis
points over Treasuries, accord-
ing to lead manager-IBJ Inters
tiaHmiai- Tha htiwh carry the
guarantee .of the AAA-rated
parent, Industrial Bank of
Japan-,:-..
Dealers sai d the proceeds
d^?%edeal litfijSgBst
outstancHng issue for IBJ and
INTERNATIONAL
But it was the st re n gth of
the dollar - which held steady
in the fast of more currency
sales by the Ehdsral -Reserve
and Eur o pean central iwnt« —
that prompted the launch of
$500m worm Of new paper yes-
ter day.
■ The Bank of Japan remained
conspicuously absent from
Interve nti o n today, aa it has
for the past few weeks, leaving
Japanese investors ixtcreaa-
ingly confident that there is lit-
tle c ur rency risk to be had in
dollars.
Indeed, dealers said that Jap-
anese enthusiasm for Hnllur
paper has pulled spreads of
Issues from Japanese corpo-
rates to some of their tightest
levels ever.
Two major Japanese hanks
file market via overseas
raising 4-year
wfil be one of the most fiqnid
for any af'fbe Japanese bank
names, ft dosed inside Its fees’
at lew XX per cent Dealers
said the issue appears reason-
ably priced and is attractive
because the size guarantees
liquidity. But it often little
yield pick-up over older IBJ
bonds, with each of two similar
hftmte t railing at 62
and 55 basis paints over Trea-
suries respectively.
Abo, Sumi to mo Bank
tal Markets, the New Yc
based arm of Sumitomo Bank,
issued a fltfto four-year deal
with a 9ft .coupon - priced
sHghfiy lower at 1QL35. yield-
ing 52 baste paints oyer Trea-
suries. The issue carries the
guarantee oftbe parent com-
pany and was lead managed by
Goldman Sadis.
Also In dollars was a S50m
three-year lasue for Canada- '
baaed lieyai trustCo. The deal,
which will be ftmgn»h* with a
8100 m issue launched earlier
this year, carries a coupon of
9% and is priced. at 100ft to
yield 80 basis points over Trea-
suries. The ori ginal tranche is
today nfffaring 30 hnk points
over Treasuries.
Tha proceeds of Royal Tru-
atco's deal. ' led by Merrill
lynch, were said to hove been
swapped with those from a
Finance, guaranteed West Ger-
man-based Tbeslng Group. The
SFr28m of five-year band issue
w an intHcated 'coupon of 2ft
per cent. The warrants are
exerciseable into stock two
years after the company goes
Also. Bank Julius Basr led a
private placement of bonds
with going-pnbBc w a rr an t s for
ABS Pmupen AG, a West Ger-
man manufacturer of diving
pumps. The SFz25m five -year
asm an indicated cou-
pon of 3ft per cant
FT DCTERNATIONAL BOND SERVICE
LhUd m* tte tatert. lalcr miU o w il bowb ft* wOfcb theta It aa adequate secon da ry matto.
asRui
srmnns i
(Sofas prices os August Z3
MfavNttlemlTVez.
tear.
A/S EkmurtfhuM7% 73, .
A/S Ek8nrtflMM7% 92— «.
BMC. Bit. FHl 10% 89._
B.F.C.E.792.
cnjum w eBi w
CUH*9.96.
X
iPaclOV
C.C.CJE7% 91___
C.C.C89%95..
C.N.CA7%91.
Ow»L)faml*99L
Cmlt National 8% 93
CTotH National 7% 92
Grant National 7 A, 9J .
Dwnrfc7%92
E.E.C.791
EX.C.7%93.
EXX.890
EJ.Bu7%40_
0-0% 983
Otaqiare
0*0% 1036
0H)(H« 40-03
0-*0(i 9.96
O-KHtlOyM
0-tOVi 9.98
- - 9Jfc
O-MH* 9M
090% 9A4
0 - 0 % ions
o-fa% lore
040% VJft
040% 9 JO
040% 9J.9
040% 154
». « w»
040 % 9 /n
EX a. 9% 97
Etac.DcFrMC*99a.
FW»9 7%97.
fW«od7%93
Ftan.ExpLCd. fl<2 92
Fort Motor DecOt 8 91
6a Eke CraAt 10% 00. —
6. MAO. 889™ —
HalKax BS9>a 90™
HotKb8%97
IUV990..
L.T.&Bof Japan 8 91
l_TXJUfJwMa897.
SzQLI
8% 95
MctramllsTalan9% 93~_—
MWaGwMrTtt.790 — _
Nanny 8% 93—
PepsiCo lac 7% 93 —
Portugal 8% W.
am. 95 % 93 %
400 192% 92%
ISO 193% 95%
100 «0% 90%
150 192% 92%
200 199% 99%
130 92% »
250 88% 88%
MO 193% 96%
1000 197% 97%
100 1102 183
113 192 92%
300. 97% 97%
15Q 193% 94
200 199% 99%
200 95 95%
in m ft
130 — —
500 192% 93%
100 93% 95% 40% 40% 932
290 92% 92% 40% 40% 9J7
350 198% 98% 40%4O% 8 XT
100 92% 92% 40% 40% 9.47
150 ’ 97% 98% 0 40% 9,70
200 94% 94%4O% 40% 9 JO
200 . 80 88%
200 191% 92% 040% 9J3
97% 97%. * "
96% 97%
200 1100% 100%
250 98% 99%
200 198% 99
100 191 91%
1000 199% 100%
100 194% .95
200 87% 88%
UQ 192% 93%
200 100% 100%
150 96% 97%
vmonwaMis
|92™
BtW»ai4%94.
Eke. Dt Fwsce5% 94—.
MM5%93..
Honmr5% 95 — — .
Sail ufltaty5% 92™.... . ■■ .
SM8bM%99 : _■
WorMBank5%92.
35 100% 100% -0% 40% 523
43 95% 95% -0% 40% 5J3
m 97% 97% -0% 0 U8
20 98% 99 0 0 5J8
30 99% 99% -0% -0% 527
50 97% 98 0 O 5 JU
150 201% 102% -0% 0 300
50 97% 97% -0% 40% 329
50 101% 101% -0% 40% sre
AMrage price cfcuge-. On<tagr-0% m week 40
Alg.
Am Bank 6%
Ned. 5% 92 FL™.
%92FL.
.1491 AS-
. Bk.lO%97£-
BP Capital 9% 93 £
BriiU Airway* 10 98 £ —
GJ.B.CMerMII% 9? Gk.
Cornu, BkAot. 12% 93A*.—
CBopLCtr.lWmAV 99 FI
CDop-Ctr-RaboA 92 FL_ — —
Tfcf*narfc7%92£Cti — ;
Bfssmll 95 £,».
PrwkMlaIOp.8% 94™.
Qaolas Airways 10% 95—
Sari ai ri>ew aa lO% 92. —
StateBkS Aint9% 93—
SwriEkpUe‘17%9)
Sued Expend 10 9Z
1791.
040% 9J3
0 40% 9J8
O OlOJO
.040% ore
040% 982
040% 9.79
0 40% 8.98
040%.l0J3
840% 10X7
040% lore
040% 940
040% 929
4140% 939
0 V O 9.43
040% 938
0-®% 949
040% 9.90
040% 949
Otuucte Bank 9% 97
0nUBIUkBU2% 95 AS
OJS10%98CS
E.LB8% 93 LF..
Hoc. Fran* 10% «C*_
Ewatom7%97ECU
EaroDma 7% 92 FI-..
Sweden 7 92 —
Sweden 8% 96-
8% 92-
Vktorian Rap U% <
worw B«k7 92-
Bank of America Canada
Banks and Grantor Elanks:
Chemical Bank of Canada
Wqrid Bank 997-
YWfudaTma Flo 8% 93 —
200 192%
300 196% 97%
125 96% 97
140 102% 102%
100 103% 103%
100 98% 98% -0%40% 9J2
100*194% 94% O 0*932
100 199% 100% 040% 9.93
250 93% 94% 040% 929
250 191% 91% 040% 9.94
200 194% 94% -0%4O% 9.79
200 197% 97% 040% 9^8
150 10S%106% -0% O 9.62
300*193% 93% 0 O 936
300 95% 95% -0% 40% 9.77
94% 95% 040%
FnEBm.Qv.Bfc.9% 92 CS
Ford Cr.Ca*JS;.93C» —
BIMteCan. 9%93£
C.MA.C.9% 93 CS
CuMAXL9% 92C*.._J
G.MA.C AM.F1&J490AS
Hal»axBS10% 97 £
■ Imp Chon bide 1008 £_
100
95%
Bank of America Canada
Canadian Imperial Bank of Commeme
Barclays Bank PLC
Westpac Banking Corporation
ABN Bank Canada
Chemical Bank of Canada
The First National Bank of Chicago (Canada)
Citibank Canada
Swiss Bank Corporation (Canada)
Banque Nationals de Paris
Mellon Securities Umited/Meflon Bank, N.A.
Westdeutsche Landesbank Girozentrale
Dealers:
Union Bank of Switzerland (Canada)
Bank of America Irtemational Lfrnited
◦BC Capital Markets
SBQ Swiss Bank Corporation investment banking Ltd
Banks’ and Grantors’ Agent
Chemical Securities Limited
Citicorp Investment Bank Limited
S.G. Warburg Securities
Bank of America International Limited
Issuing and Paying Agent
The First National Bank of Chicago
Bank of America
New Zealand
utility seeks
NZ$2.5bn
By Our Fi nanc ia l Staff
ELECTRICITY Corporation of
New Zealand is to raise
NZgLSbn (USgLftm) over the
next three years through a
soles of bond tenders which,
when complete, will represent
the biggest publicly-listed cor-
porate bond on the Wellington
stock market.
The first tender, for
NZSzoQm. will take place next
month. Bank of New Zealand
n-nfl National Bank of New Zea*.
land will lead and und er wr it e
tire issue, which wffl.be closely
modelled on & 10 per cent. Are*
year govern m ent bond.
Next month's issue wffl. be
the second securitised borrow-
ing by the state-run ECNZ this
year. In May the corporation
successfully launched a '
NZSSOQm promissory note.
The Government turned
| ECNZ into a corporation last
year, valuing its assets at
NZ$ft3bn. The Government ,
wants repayment frar the assets
•within three years. ECNZ said
earlier tins year that it expec-
ted to -have to raise around
NZ$500m every six months
| over the next three yeais.
ECNZ.- which generates
nearly all New Zealand’s -
power, expects to repay the
Government NZ$L4bn in the
current fiscal year. It plans
eventually to issue 10 - and
even 20-year paper.
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St notK«S: two
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with Hambros hank, saldJ^J
ptoceeds had been swapped
foat bond and cunvngjnartK*
reaction to the budget wm
muted because much of
good news hod been widely
“Equity warrant bond PriceB
slhraed as much as a half-point
forsame issues, leaving re dy
two of tbe seven post
faatww trading It 1 ”* 1 ** fees. This
means that co- mana gers are
having losses of pp to ift
points on soane deals, suggest-
W that coupon levels on
tesues will have to rise still fur-
fber.
Nomura fixed the cocqptmai
its eariier issue of K hiM
bod Railway at the indicated
5% level, but said it is ft point
outside tees at Jess 97ft.
Two West German compa-
nies ’ issued bonds with
sorixdled going-public war-
rants, toe first foreign borrow-
era to do so. TDB American
Express Bank led a public
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19
FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
UK COMPANY NEWS
Evans Halshaw expands to £3.65m
By Richard Tomkins, Midlands Correspondent
CONTINUED BUOYANCY fa
Uic UK car market helped
Evans Halshaw. the Btrnxfag-
ham-based motor dealer, pro-
duce another strong rise in
pre-tax profits from £2.41m to
£3. 65m for the six wwvnth^ to
cnd-Junc.
Mr Geffrey Dale, chairman,
said the group’s acquisitions
had enhanced earnings but
most of the growth had come .
from existing ' operations
within the company’s three
divisions — motors, the
Moprod components operation,
and contract hire.
Mr Dale also sounded a note
of caution over failure trends fa
the UK motor trade, pointing
out that the rate of g rowth fa
car and truck registrations was
unlikely to be sustained. at
present levels of u to 12 per
cent
Group turnover rose from
£102L8m to £129. 2m. trading
profits rose from £JL87m to
£L37m, and the interest charge
rose from £458400 to £728400.
Earnings per share rose by
47 per cent from U.4p to I64p
and an interim dividend of 3p '
has been set, up from 2p.
Both the pre-tax profit and
the 50 per cent . dividend
increase were forecast by the
company last month when it
acttxmpanied the purchase of
three more Ford dealerships
with a £L74m rights issue.
Mr Dale said all the group's
dealerships - . now numbering
83 - bad increased The
Jaguar: and truck businesses
baa been particularly success-
ful. while the Ford dealership
in Preston, the Rover dealer-
ship fa Hanley and file . BMW *
business in fOiftwhawi had per-
formed sluggishly because of
relocation or reorganisation ■
The Moprod distribution
operation had semi the acquisi-
tion oS the sole Moprod distrib-
utor in Northern Ireland fa
January a nd contract hire was
benefiting from the steep
growth fa the fleet size which
started three years ago.
“Our trading fa Aug ust i s
exceptionally strong and gives
me confidence that the group
will exceed its objectives far
the fall year," Mr Dale said.
• COMMENT
The spectre ofrisfag Interest
rates has served to underline
worries about the sustainabil-
ity of booming UK car sales
and Evans Halshaw wisely
offers its own warning over the
long-term outlook. But the
degree of Evans’s exposure to
new car sales needs to be kept
fa proportion: Such is the
group’s spread of Interests
across the motor trade that its
chairman reckons new car
sales would have to drop by 5
per cent before its own pre-tax
profits began to fail- As with
house prices, however, the
present consensus is that a
slowdown fa the rate of
increase Is more likely than a
d e cl in e : And against this back-
ground Evans Halshaw is
establishing itself as cue of the
City’s favourite motor distribu-
tors. The dilution produced by
last month’s rights issue chal-
lenges the company to come up
with mare strong acquisitions
of the UBM Motors variety to
sustain above-average earnings
growth next year, but with
around £9J5m in sight this
time, the prospective multiple
of 9.7 at yesterday’s 348p puts
the shares at a premium to the
sector and indicates the mar-
ket’s confidence.
F arnell unveils bid for Wayne Kerr
By Philip Coggan
FARNELL ELECTRONICS, the
Leeds-based electrical compo-
nents distributor, yesterday
announced the long-awaited
bid for one of - its suppliers,
Wayne Kerr, Bognor Regis-
based electronic test equip-,
meat manufactures'.
A bid from Famell has been
rumoured ever since November
1986, when it bought a 6.26 per
cent stake in Wayne Kerr,
increasing its holding to 10 per
cent the following year.. -
Yesterday’s cash offer values
each Wayne Kerr share at llOp
and the whole company at
£lL6m. There is a share alter-
native of two Famell shares for
every three in Wayne Kerr,
valuing each of the. latter at
lOOp, based on last night’s dos-
ing Famell price of 150p, down
2p. Wayne Kerr's ' shares rose
7p to 107p.
USM-quoted Wayne Kerr has
had a mixed profits perfor-
mance afaoe.it Joined the mar-
ket in 1985, via an aflfer-forsale
which valued each share at
130p. Although profits rose by
£200,000 to £L3m fa 1985, prob-
lems in the US caused a fall to
£553,000 the following year.
Yesterday, the group
announced an increase In
interim pre-tax profits from.
£261400 to £501,000 fa the six
months to June 30. Profits on
continuing businesses
inrrpa^ffd roily marginally from
£485,000 to £501400, although
earnings per share doubled
from L5p to 3p.
Famell was the subject of
some controversy earlier this
year when it decided to treat
losses on its equity invest-
ments as an extraordinary,
rather than an exceptional,
item.
The group’s auditors wanted
to treat the item as excep-
tional, which wonld have
knocked FarneQ’s pre-tax prof-
its, but after a dispute, the
auditors decided not to qualify
the accounts.
Irish Distillers receives
further approaches
By Lisa Wood
IRISH DISTILLERS, distiller of
Bushmills and Jamesons whis-
key,- said yesterday it was
examining a number of
approaches in addition to the
I£253m (£2I2m) hostile bid from
Grand Metropolitan.
The company refused to say
whether they were possible
offers or businesses seeking a
substantial minority stake to
block the bid from GrandMet,
which is offering l£4 per share
or guaranteed loan notes.
GrandMet, which was buying
in the market yesterday, is
understood to have taken its
stake to about 44 per cent
■ Analysts .were pooled as. to
which of the major drinks com-
panies Irish Distillers could be
talking. Pernod-Rlcard has
announced It is not pursuing
the company. Guinness,
ADied-Lyons, Bols, and Sun-
tory are understood not to be
in the running. Seagram, the
Canadian group, was making
no comment yesterday. How-
ever it sold a stake in Irish
Distillers a year ago and
through a distribution agree-
ment recently struck with
GrandMet it would have access
to the whiskey brands should
they be acquired by GrandMet.
The bid is likely to .be
referred.
BMO’s agreed Varo bid
blocks United Scientific
By Clay Harris
UNITED SCIENTIFIC
Holdings, defence equipment
manufacturer, last night was
considering its response to a
rival. agreed bid for Varo, the
US maker of. night-vision
equipment which United Scien-
tific has . been stalking for
neariysix months.
fa early trading fa New York
yesterday, Varo shares were
$2% higher at 125%. The rec-
ommended $2> offer from IMG
Delaval values Varo at f ii2m
(£6 6.7m).
Last week. United Scientific
raised its bid to $22 per share,
from the $1740 which had been
on the table since February.
Varo’s agreement with IMO
contains provisions intended to
inhibit new bids. For examp le,
the offer depends on IMO
receiving two-thirds of Varo’s
shares outstanding an a fully
diluted basis. Varo will pay
New Jersey-based IMO 83m
under certain circumstances fa
which the merger is termi-
nated Or the bid TmKiirapRKfiil
In addition, Varo agreed'
to grant IMO an option on up
to 835450 authorised, but unis-
sued shares at S25 each.
Analysts do not believe there
will be any US anti-trust barri-
os to the IMO-Varo deal
J.
This announcement appears as a matter of record only
MAXWELL
COMMUNICATION CORPORATION pic
has acquired
IBM's wholly owned subsidiary
SCIENCE RESEARCH ASSOCIATES (SRA)
and. its subsidiaries in Australia, Canada and
in the United Kingdom
for
US $ 150 MILLION
The financing has been arranged and provided by
DRESDNER BANK AKTIENGESELLSCHAFT
-London Branch-
o
July 1988
HongkongBank
The Hongkong and Shanghai Banking Corporation
Incorporated in Hong Kong with limited liability
1988 Interim Report
The Directors announce that the unaudited profit for the six months ended 30 June 1988 attributable to the
shareholders of the Bank was HK$1,674 million (1987: HK$1 ,412 million), an increase of 18.6/7ercem. The profit was
arrived at after providing for taxation and after making transfers to inner reserves.
The Directors have declared an interim dividend of HK$0. 13 per share (1987: HKS0.11 adjusted), resulting in an
increase in distribution per share of 18.2 percent. The dividend will be payable on 29 September 1988 to shareholders
v^hose names are on the Register of Shareholders on 28 September 1988. It will be payable in cash, with a scrip
alternative, in accordance with arrangements previously annou need .
In Hong Kong the pace of economic growth was strong during the first half, but exports increased at a more modest
rate. Inflation remains a cause for concern, and there are signs of overheating in the property market, but overall the
economy performed well. The stock market continued to recover and the US dollar exchange rate was stable . The
banking sector, helped by strong loan demand, enjoyed steady profit growth .
Elsewhere in the region most major economies grew satisfactorily, and the Bank’s traditional operations prospered
accordingly. In the Middle East results were mixed but showed some improvement. In North America Marine
Midland Bank returned to profit and Hongkong Bank of Canada produced an encouraging performance. The
operating results of Wardley, the group’s merchant banking arm , were in line with expectations. The James Capel
group continued to operate profitably but their results, and those of CM&M, were adversely affected by difficult
trading conditions. Other group subsidiary and associated companies performed satisfactorily.
Midland Bank, in which the group acquired a 14.9j*rr cent interest last December, recently announced improved
results and the partnership is already bringing benefits to both parties. Business links have been strengthened and
agreement has been reached on the transfer of a number of branches and subsidiaries. Some of these transfers have
already taken place and others will be completed in the coming months. The group has now absorbed the Midland
operations in Singapore, Korea and Canada and will have transferred to Midland, or sold or closed, the Bank's branch
operations in continental Europe by the end of this year.
In April the Bank sold its branches in Fiji, Vanuatu and the Solomon Islands to Westpac Banking Corporation; and
last month, in accordance with itsstrategy of further strengthening the group's capital base, the Bank placed £150
million of long-term subordinated loan capital with a number of international financial institutions.
While there may be some slowing down in the second half of the year, your Directors expect profit trends will allow
them to recommend a final dividend for 1988 of not less than HK$0.26 per share, equivalent to an increase of
approximately 13.0 percent in the dividend per share distribution over 1987.
Consolidated Profit and Loss Account (unaudited)
6 months to
30 June 1987
6 months to
30 June 1988
HK$m
Net profit of The Hongkong and Shanghai Banking Corporation
HK$m
£m
US$m
1,454
and its subsidiary companies
1,737
130
222
136
Share of net profits of associated companies
146
11
19
1,590
1,883
141
241
(178)
Profit attributable to minority interests in subsidiary companies
Profit attributable to the shareholders of
(209)
(16)
(27)
1,412
The Hongkong and Shanghai Banking Corporation
1,674
125
214
(159)
(566)
Transfers to reserves by subsidiary and associated companies
(208)
(16)
(27)
Interim dividend
(679)
(51)
(87)
687
787
58
100
2,744
Balance brought forward
3,912
292
501
11
Exchange adjustments ...
7
1
.2
- -3;442 -
Retained profits carriedforward • ■
4,706
351
- ~603~
HK$0.29
(adjusted)
Earnings per share _
HKS0.32
£0.02
US$0.04
HKS0.11 Dividend per share
(adjusted)
Consolidated Balance Sheet
HKS0.13
£0.01
US$0.02
SI December 1987
(audited)
30 June 1988
(unaudited)
HK$m
HK$m
£m
US$m
11,818
Share Capital
13,063
974
1,674
2,076
Share Premium Account
892
67
114
15,493
Reserve Fund
16,054
1,197
2,057
3,912
Retained profits
4,706
351
603
33,299
34,715
2,589
4,448
2,743
Minority interests in subsidiary companies
2,909
217
373
18,650
Loan capital and preference shares
18,723
1,396
2,399
54,692
56,347
4,202
7,220
22,504
Hong Kong currency notes in circulation
23,894
1,782
3,062
745,228
Current, deposit and other accounts
791,970
59,058
101,490
1,229
Dividend payable
679
51
87
13,747
Acceptances on behalf of customers
14,916
1,112
1,911
837,400
887,806
66,205
113,770
207,812
Cash and short-term funds
241,203
17,987
30,910
65,418
Time deposits with banks payable within twelve months
61,337
4,574
7,860
30,742
Trade bills discounted and bankers' certificates of deposit purchased
34,291
2,557
4,394
22,444
Hong Kong Government certificates of indebtedness
23,834
1,777
3,054
46,952
Investments
50,263
3,748
6,441
427.211
Advances to customers and other accounts
438,852
32,726
56,238
800,579
849,780
63,369
108,897
2,452
Investments in associated companies
2,594
194
332
16,626
Bank premises and other properties
16,537
1,233
2,119
3,996
Furniture, plant and equipment
3,979
297
511
13,747
Liabilities of customers for acceptances
14,916
1,112
i,911
837,400
887,806
66,205
113,770
Closing of Register of Shareholders
The Register of Shareholders will be closed from 12 September until 28 September 1988 (both dates inclusive). In
order to qualify for the interim dividend, all transfers (accompanied by the relevant share certificates) must be lodged
with the Registrars not later than 4.00 pm on 9 September 1988.
Directors’ Interests
At 30 June 1988 Directors and their associates had the following interests in the shares of the Bank. Except where
otherwise indicated, these interests were beneficial interests.
KW Barker
9312
KSLi
1,684,716
J R H Bond
25,611
CW Newton
5,782
DE Connolly
458360
W Purves
84,277
LSDunn
21,345*
H Sohmen
989,100:
FR Frame
52,959
JJSwaine
683
R R Frederick
28,160
JCCTang
33.000
J M Gray
31.766
G A Thompson
11,000
DGJaques
53,659
P J Wrangham
116,011
: non-beneficial interests
As Directors of Marine Midland Bank, N. A.. J R H Bond, F R Frame, R ^Frederick, N R Knox. W Purves and G A
Thompson each had a beneficial interest in 10 shares of common stock of that Company.
By Order of the Board
RG Barber
Secretary Hong Kong, 23 August 1988
- - t \ _ A •* > «
financial
ttv.pc Wednesday auoust 24 im
UK COMPANY NEWS
[ftext expands Snto garden products
with £2.9m acquisition of G T Sutton
NEXT, the retail group, yesterday announced that it is buying a ■
90 per cent interest in G T Suttcn, a small horticulture company,
for £2.9m.
Next says that the acquisition is part of a declared policy of
expanding into the sphere of gardening and garden-related prod-
ucts, and is also consistent with its policy of underp inning its
supply source.
Sutton is principally involved in growing and marketing rose-
trees and garden-shrubs and plants. Yesterday afternoon, no one
was available to elaborate at Next
The acquisition price will be met by the issue of L12m Next
shares and £287.545 in cash.
PgViPEflPS ANNOUNCED
Correa • Total Total
Currant Date of ponding for last
payment payment dividend year year
Cambridge Elect. Int 2.65 Nov 1 2.4 - 8.5
ESC Group § Int 3.6 - Z32T - 7
E&S investors Int 0.65 - 0.55 - 1.7
Evans Hafshtov int 3t Oct 7 2 7
Fed. Housing ini 25 Oct 31 1.7 - 5
Front Group Int 4 - 3-7
Ufa Sciences Int 0.5 Oct 18 0.3 - OS
Lend and St Law — int 2.1 6J - 1.46 — —
NB Int 1.8 Jan 3 1.65 - 5J5
Pteaeurama int JL25t Oct 12 2 ”5
Scand. Sank Int 2-82 Oct 6 2.7 - 8
Taylor Woodrow int 3 -23-10.5
Temp. Galbraith int 3.5* Oct 10 3.5 - 10
Dividends shown pence per share net except where otherwise stated.
‘Equivalent after allowing for scrip issue. tOn capital increased by
rights and/or acquisition Issues. §USM stock. §§Un quoted stock. ♦Third
market. *US cents throughout f Includes special payment of 0.6p.
BOARD MEETINGS
Mecca Leisure chiefs launch scathing attack on bid target’s half year results
Pleasurama advances by 38% to £22.5m
By David Waller
PLEASURAMA, the casinos,
holidays and slot-machine
group fi ghting a £750m take-
over bid tram Mecca Leisure,
yesterday announced a 38 per
cent rise In pre-tax profits for
the six months to the end of
the June.
Although broadly in line
with brokers’ expectations, the
increase In profits - from
£l&3mto£2&5m - came in for
scathing criticism from Mecca.
Mr Michael Guthrie, chair-
man and chief executive of the
predatory company, claimed
that the figures reflected the
“ Hi cappfvfntlwg performance” of
both Pleasurama's core busi-
ness and aegraritton strategy
over the last two years.
Mr Jeremy Long, Mecca’s
finance director, expanded on
this, painting out that the pre-
tax profit was struck after capi-
taHmg interest of £i.23m. Fur-
thermore, he claimed that the
true basis of comparison
KfrnnM be the first half of 1986,
not the first half of 1987.
Yesterday’s figures showed a
20 per cent Improvement in
earnings per share, from Up
to 8.1p. Mr Long said that
invertors should focus on the
535p Ttiptfr in the first half of
1986.
“Last year’s earnings were
heavily depressed because of a
fan-off in the casino market,”
he said. They had no such
excuse in 1986 and it is disturb-
ing that earnings ahonid have
increased by only 10 per cent
over two years.
"This is despite spending
well-nigh £150m on acquisi-
tions ove r the p eriod. Th e flg-
ures just prove what we have
said all along - that Plea-
snrama have made a series of
expensive acquisitions which
have had hardly any impart nn
earnings."
Mr Barry Hardy , Plea-
surama’s development director,
retorted by saying that the
group had been transformed
Tim Inflowing co mpani es have notified daunt
of board moeUngs to the Slock Exchange.'
Such medUnge on, usually hold for ffte pur-
pose of considering dividends. Official Indies-
Uons ore not availabfo as to wheifisr the
dividends are Interim* or finals and tile sub-
divisions shewn below are based mainly on
last year's timetables.
TODAY
rnterlms- Barr A Wallace Amok} Trust. Han.
son, Jourdan (Thomas), Pennine Optical,
Queens Moat Houses, RKF, VIctauJIc, Wales
City of London. Weir Group.
Finals- SeJecTTV. Trans-NetaJ Coal Corp.
American Trust
Aspen Communications „
Bank of Scotland
ErBh _
Guinness
Hans, Homes 6 Gardena .
Ibnocfc Johnsan —
Lambert Howarth —
Plckwfc*
Robinson Brouters
T ronoh Mines _ —
Coronation Syndicate —
Goodbead Print
Wghgaiea Job
News Corp. .....
Nows Inti
Tweafontaln Utd Coderlea
Investment business fall
hits Scandinavian Bank
TRINIDAD AND TOBAGO
The Financial Times proposes to publish this survey on:
MONDAY 3RD OCTOBER
For a full editorial synopsis and advertisement details, please contact
NIGEL BICKNELL
on 01-248 8000 ext 3447
or write to him at:
Bracken House
10 Cannon Street
London
EC4P 4BY
By David Barcfcurd
SCANDINAVIAN BANE
yesterday announced pre-tax
profits of £U.4m for the six
months ending June, well
above its pre-tax profit figure
of £517,000 in June 1987, when
file bank made exceptional pro-
visions of £14m to cover losses
on developing country debt.
This year there were no
exceptional provisions. How-
ever, excluding the debt provi-
sions of June 1987, a compari-
son of this year's pre-tax
p ro fi ts to June with those of a
year ago shows a fall of £3 Jin.
Mr Garrett F Bouton, manag-
ing director, said the fan in
profits resulted from a decline
in business by the bank's
Swiss-based global investment
management operation.
"Operations in our other
three business have improved
since the start of file year,”
and Scandinavian is now build-
ing up its merchant bank and
corporate financial services
arms and has formed a team to
specialize in trading devel-
oping country debt," he added.
Since January Scandina-
vian's capital resources have
grown from £217Bm to £257.6m.
Security Services
Maintenance Services
Auction Services
"The first half of 1988 has produced
record results in a period of
consolidation following last year’s
acquisitions of BCA and ADT".
Michael A Ashcroft
Chairman and President
ADT
interim
results
Interim Results
ToJune301988
Net sales
Earnings from operations
before interest and income taxes
Net interest
Earnings from operations
before income taxes
Net earnings from operations
Net earnings per common share
Net earnings per ADR*
‘Each American Depositary Receipt (“ADR")
represents 10 common shares.
Unaudited
6 months
to June 30
1988
US$m
916.8
98.0
117.9)
Unaudited
6 months
Audited
year ended
to June 30 December 31
1987
US$m
431.3
1987
US$m
1.234.4
133.5
155.4
25.1c
$0.93
$0.79
For a copy of the 1988
Interim Report, apply to:
Prospect House
The Broadway
Famham Common
Slough SL2 3PQ
Barry Hardy - group has been transformed.
over the two- year period . “We
are now a much mare diversi-
fied group,” he said. "IFa like
comparing ohaik with cheese.”
He pointed out that the basis
of the group’s strategy had
been to move away from over-
dependence an fickle e a rn i n gs
from e ntdryw- If earnings had
improved by only 10 per emit
in absolute terms, their quality
was enhanced immeasurably.
Answering Mecca’s criti -
ci-gnia about Interest cap i t a Us a -
tton, he said that this related
to a number of development
projects and was a perfectly
reasonable treatment, given
the company’s recent move
into property.
Group turnover rose 43 per
cent to £M&08m, and trading
profits rose by 56 per cent to
£27.4m. London casinos did
particularly well, increasing
their contribution from £&33m
to 27.46m; hotels and holidays
also did well. rising from EL3m
to £4.48x0. There was a faUstx
months' contribution from
President Entertainment,
accounting for t he r ise in
caierizig/senend leisure profits
from £OJ32m to £S3 3 tt.
The interim dividend was
raised by 13 per cent to 2-2Sp;
the shares edged down lp to
246p ahead of today’s posting
of the M ecc a offer doc ument .
See Lex
Crash leads to midway setback
for Templeton, Galbraith
with reserves up from £28.8m
to vaa_im and loan capital up
fay 82 per cent to £10&3m.
Minority interests have been
reduced from £273m to £2S.7m,
while shareholders' funds have
risen from £131 ,4m to 21265m.
The bank's balance sheet has
shrunk, according to Mr Bou-
ton, partly because of a deliber-
ate decision to emphasize
return on assets but also
because of the effect of cur-
rency fluctuations on its mul-
ti-currency operations.
Liquid and short term assets
were up to £814m (£644zn), but
deposits of less than one year
with other banks were down to
£488xn (£836m). Loans and
advances were £L45m (21.48m).
Acceptances were £75m
(£125m) and fixed assets and
other accounts were £154m
( 2161 m).
The bank transferred 25.4m
to reserves (25.6m t ransfe rred
from reserves). Earnings per
multicurrency unit in which
the bank’s capital is denomi-
nated woe 9.7p (loss of 4-7p)
and a dividend of 2B2 per unit
was declared (2.7p).
By David Walter
TEMPLETON. Galbraith &
Hansberger, Nassau-based fund,
management group which
Joined the London stock: mar-
ket in 1984, yesterday repotted
pre-tax profits down from
$26 .56m to $2l.62m (£l2£7m) in
the six months to the end of
June.
Mr Tom Hansberger, chief
executive, yesterday that
tire fall in profits was regretta-
ble but inevitable in the after-
math of last October’s market
correction.
He drew solace, however,
from the fact that funds under
management had actually
grown in the last year, and
said the group had taken
advantage of pok-crash condi-
tions to shift the emphasis of
its business.
At the end of the half year,
the group was managing assets
of $12-9bn, compared with
$l2ibn on June 30 2987 and
$10.4bn this January- Of the
first half total of $12ifon. some
$l.7bn was new money raised,
compared with $L3bn of new
funds attracted In the first six
months of 1987.
Mr Hansberger said that 58
per cent of the new money
came from public underwrit-
ings of closed-end mutual
funds (akin to investment
trusts in the UKX for which
Templeton receives no commis-
sion.
Although there had been a
substantial drop in commission
generated by sales of mutual
funds to the public, this had
been offset by higher fee-in-
come based on the enlarged
funds under management.
Turnover fell by 24 per cent
to $51.97 m. Mr Hansberger
attributed this to the fall in
gross commission, which
accounted for 39 per cent of
turnover against 57 per cent a
year ago.
Earrings per share fell from
13.8 cents to 1LB cents; the,
interim dividend Was pegged at
35 cents a share.
• COMMENT
The drop in Templeton’s
earnings was the first in the
. group’s history, according to
Mr Hansberger yesterday.
Under the circumstances, it
was hardly surprising and the
shares failed to react, closing
unchanged at 126p. The figures
suggest that Templeton has
adapted with some agility to
post-crash conditions, moving
away from the retail side of the
business and introducing
fixed-income rather than
equity funds. Not only did dis-
tribution expenses fair dramat-
ically as a result, but there was
a significant shif t away from
gross commission income
towards higher quality invest-
ment advisory, management
and service fees. This is
encouraging, and the group
should make $44m in the full
year, putting the shares on a
prospective multiple of around
9, underpinned by a 6.5 per
cent yield. But it remains to be
said that only the most
devoted exponent of the con-
trarian theory of investment
would buy the shares now,
even though: they stand well
below half the price they
achieved a year ago. A surge in
the US dollar would help senti-
ment, though-
Berisford
bid for
Billingsgate
hits snag
By Paul Cft w« lght»
Property Correspondent
THE BID by a S & W BeWW
subsidiary to buy
erence «hare» of BQBngsgate
Oty Securities »»&***«-
Kuwiit SomlDM*
buying the
share, compared wl 1 * 1 the
Berisford offer price of ISOp-
A acrid of purchases, row-
dieted by Monday evening.
Sited the UBS Nominees stake
Cron, 5L2 per cent to 9.2 per
cent Once UBS Ncanhwos tot
the market the share price
slipped back to I33p
Tfcaalm of UBK Nominees is
evidently to force a substan-
tially higher offer out of
Erlanger Commercial, the
Swiss unit being used by
Berisford to mount the otter.
But charterhouse Bank, which
Is HawiUttfr the offer for Erlan-
ger, said the offer price was
believed to be fair.
-The Billingsgate preference
shares are one of three layers
of securities issued in Jaw
1986 to form a single asset
rty company based on
City of London office building.
Berisford held all the ordinary
shares and there was a deep
discount bond. The preference
shares, quoted in London since
jane, are the only single asset
property company securities
available on the market.
The pre f e r ence shares, origi-
nally listed in Luxembourg at
106p, have never been actively
traded and that is one reason
why Berisford mounted the
bid to mop np the issue. It has
control of 52 per cent or the
issue. But independent direc-
tors have not advised share-
holders to accept the offer.
pn«natMl Montagu House was
valued at £X10m last March
and this figure is the basis of
the Erlanger offer. However,
bnfldlng to be worth 2145m.
giving the preference shares a
net asset value of 178p.
It added that its view was
shared by another, unnamed.
City institution. Together the
two account for 15 per cent of
the preference shares.
- f
■* . *
: M • 5
. . i
This announcement appears as a matter of record only
Management Buy-Out
of
O
cq jA f
GROU.P
for
£55,200,000
SYNDICATED DEBT FINANCING
Arranged and underwritten by
Standard Chartered Bank
Participants
Bank of Scotland
Banque Frangaise du Commerce Exterieur (London Branch)
Barclays Bank PLC
Canadian Imperial Bank of Commerce
The Industrial Bank of Japan, Limited
National Westminster Bank PLC
Socidte Gdndrale
Standard & Chartered
July 1988
f
FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
21
or
^ s £u ( .
■ S' ,
*- .«-i ..
■ * V.
•“ f'.
•'- r >r-
" 'hr
I .
1.
■ l
e • •.
■* Vf*-*
.» •••■ \ -
• ••
w C
r
*f r;:
CAMBRIDGE
ELECTRONIC INDUSTRIES PLC
INTERIM RESULTS
H
H
- * ..
Six months to 30th June
1988
1987
Change
• ' 1- -■ 1,
Turnover
£74.9m
£68. 3m
+10%
_
Profit before caxacioo
£6.0m
£5.0m
+20%
‘ " :* .. c
Earnings per share
: 7.7p
+19.5%
- ■ ( *-■
Interim dividend per share
2.65p
2.4p
+10.4%
* GEFsbusmess continues redevelop well: its strong financial position and
most satisfactory cash flow prorofe a springboard for major nranapn .
* CEI has agreed to acquire two U.S. electronic component businesses
which will provide CEI with a significant manufacturing base and
distribution network in the U.S. as well as a substantial extension to
its product range.
* CEI is also currently in discussions for the acquisition of a further two
electronic component businesses based - in continental Europe.
* Both the U.S. acquisition and the proposed European acquisitions
represent important steps in CETs international strategy of
strengthening its marketing and manufiuxuring facilities in die larger
markets erf the world.
Copies of the Interim Report and of the 1987 Anmtal Report an
available from the Secretary, Cambridge Electronic Industries pic.
Botanic House, 100 Hills Road, Cambridge CB2 1LQ ,
— — ‘ fa hwiil to rnifl—n irlti tfi rnnliinit fnr ’
Application has been made to the Council of The Stock Eachany for the Ordinary Shares of 50p
each in Wff Gnnp pic now in issue and propo a e d to be issued porsoant to the R^hti Issue to be
admitted to the Official Lite. This advertisement appears a* a matter of record only and does not
con sti tute an invitation to the public to anbacribe for shares.
A
GROUP
pin
{Incorporated I* England under the Companies Act 1929 Registered No. 358466)
Introduction to the Official list
Sponsored by SBCI Savory Mflln limited
and
Proposed Rights Issne of 2,435.826 new Ordinary Shares of 5Qp each at 1 SQp per share
Share Capital following proposed Rights Isme
Au th o ri sed
£6,250,000
h Ordinaiy Shares of 50p each
Issued and •
proposed to be
issued fhllypaid
£4,871,651
EBC Onwp pie is the hoMin* company for a troop oT companiea engaged in exmatraction and
property devdopraent operetina mainly in the Wear Country in an area bounded by a line to the
Cast drawn between CBoucerter and Portsmooth-
Details relating to T RUC Group pk: are amiable in the new issne cards circulaied by the statistical
•ervioca of End Financial limited, listing Pvticatass have been published and copies may be
obtained for personal ooOectioa from the Company Announcements Office, The Stock Exchange,
46 Fmsbtay Square, i ffwdmn EC2A 1DD for two days fina the date of tins notice and during
ponnal hutinewhouia on say weekday (Saturdays and pubBchotidaya excepted) up to and i n c l u din g
7th October, 19*8 from:
SM3 Savvy MBs
EBC Group pic
130 HM Street.
IEC2V6AQ.
63 St. DavU*a HIB,
EntvEX44DW.
PLC,
Ba gl t t m r a P ap - fret
PX). Box 83,
CaBf n av e .
RedcUflc Way,
*7YA
24th
ponce of issue abmugeo particulars
ThiM advertisement is Issued in compliance with the requirements of the Council of The Slock
undermentioned Stock to be admitted to the Official List.
The Bristol Waterworks
Company
(incorporated in England on 16th July 1846 by Tt» Bristol Waterworks Company Act, 1846)
OFFER FOR SALE BY TENDER
on behalf of
THE BRISTOL WATERWORKS COMPANY
■by
SEYMOUR PIERCE BUTTERFIELD LTD.
of
£1,846,153 4-9 per cent. Ordinary Stock
(orauchleaawainountmStockBawn.writhpnniiufttAralwaniaxhQuinofGBmilHon)
Minimum Price of issue £325 per £100 of Stock
T ° ,a, »
TMmn tor 1 Ordinary Stock rM b«
Popartmvit.'RO. taa » ggP" ***"*• Shad,
thanffajiucw WodnoodafraiWtAUfliu*^ 1 **^^^-
^ forcoaactlorMmhft. <tartn g | °* *^* x ^ n *“ bow today
.^.1 TIU AllOUSt. tMC ffOOrt"
imipaUrt Augoat,tMt from;—
S^RKHirneicalMiJ^WUd..
W, OW dowry; Loodoo.KJaOBEA-
NatlonM Westminster Sank PIC,
UK COMPANY NEWS
Cambridge Electronic rises to £6m
despite components side shortfall
By Andrew Hill
CAMBRIDGE ELECTRONIC
Industries, which yesterday
announced the purchase of two
US electronic components busi-
nesses from its former parent
company Philips, also reported
pre-tax profits up 19 per cent to
£&0lm in the six months to
June 30. Group turnover rose
10 per cent to £74L9m.
Sales at the taterconnection
technology division Increased
by 9 per cent to £23.4m
(£21 .5m). The division’s trading
profits grew 42 per cent to
£?..2Sm (£LS9m), with Bepi Cir-
cuits returning to profitability.
However, the electronic com-
ponents division suffered a set-
back in trading profits, which
feH from £L48m to £979,000 on
sales of £lR.lm (£L7^m).
CEI said this was caused by
the short-term difficulty of
recruiting and retaining per-
sonnel at the Hinchley trans-
former and power supply sub-
sidiary, based at Devizes,
Wiltshire, arid an unexpected
surge in orders from important
Japanese customers. Belling
Lee, circuit protector and filter
manufacturer, had a disap-
pointing start to the year.
£l-57m (£ 1.03m) on turnover of
£16.&n (£l!L2m).
Earnings per share advanced
U5p to 9.2p and CEI declared
hn interim dividend of 2.65p
(2.4p).The shares fell I4p to
246p.
• COMMENT
Defence and instrumentation
profits rose to £L37m (£L28m)
on sales of £l&6m (£16.4m), and
the group said it hoped to be
awarded a £10m instrumenta-
tion contract in North America
within the Tn»gt three months.
Specialist companies pushed
.up profits by 53 per cent to
Analysts seem dnbious about
CETs ability to pep up the new
US businesses. The acquisi-
tions will probably not dilute
earnings, and they certainly
broaden CEI’s geographic
spread, but the question is
whether the companies are
capable of growth now they are
free of the Philips fetters.
Profit margins at the two com-
panies have been declining for
the last five years, and the UK
group has said it is unlikely to
replace existing management
Nervous observers also recall
the history of CETs one previ-
ous US acquisition, Elec-Trol,
bought in 1982, which returned
to profit in 1987 after two years
in the red. These worries were'
compounded yesterday by dis-
appointment about Hincbley’s-
losses. blamed on the turbulent
Devizes labour market That
said, the other subsidiaries per-
formed creditably and the com-
pany is moving forward, after a
few years of painful rationalis-
ation. If full-year profits
approach ElGm, the shares look
fairly valued on a prospective
p/e of just over 10.
Holmes & Marchant acquires Catalyst
By Philip Coggan
HOLMES & MARCHANT
Group, marketing services
company, yesterday announced
a recommended £12.9m offer
far Catalyst Communications,
sales promotion and design
gro u p, which recently moved
from the Third Market to the
USM.
Irrevocable acceptances have
been received from holders of
4S.8 per cent of Catalyst's
equity. Holmes acquired BJt per
cent of Catalyst’s shares yes-
terday, bringing its stake,
inclnffiiig acceptances, to a lit-
tle more than 50 per cent.
Yesterday, Catalyst
announced pre-tax profits for
the six months to June 30, of
£583,000 a tiny increase on the
£579,000 in the first half of last
year. While turnover increased
just 3.3 per cent to £7.69m
(£7, 44m), administration
expenses rose by 30.7 per cent
to £2.56m (£1.96m). Earnings
per share fell 16 per cent to
2-lp (2J>p).
Analysts estimated that the
result was likely to dilute
Holmes’ paming ft per shar e by
about 15 per cent in the next
financial year.
Catalyst said that one sales
promotion company. Alternate
Resources, was affected by
adverse exchange rates and a
build-up in casts, resulting in a
first-half loss. New manage-
ment hag been tngtwtieH anil
the company was operating
profitably.
When the offer becomes
unconditional, Mr Tim Rosen,
chairman and Mr Leslie Kent,
managing director, of Catalyst
will resign.
Holmes is offering one of its
ordinary shares for every four
in Catalyst On the basis of last
night’s closing Holmes share
price of 247p, down I8p, the
offer values each Catalyst
-share at about 62p. Catalyst’s
shares closed up 6p at 58p.
The move is the latest in a
series of acquisitions by
Holmes since it joined the
stock market three years ago.
Last month the company paid
£3m for Broadbent, Londori-
based advertising agency.
Catalyst has also been active
in the acquisitions field since it
became one of the first compa-
nies on the Third Market in
January 1987. Particularly it
built up its sales promotion
activities which accounted for
about 60 per cent of profits last
year.
Halfway
losses at
Olives
Paper Mill
By Philip Coggan
OLIVES PAPER Mill, paper
and property company, yester-
day announced an interim pre-
tax loss of £31,600. compared
with a profit of £115,000 at the
same stage last year.
As at the previous foil year,
exceptional items, principally
compensation paid to former
directors, pulled the company
into the red, despite the fact
that the group made a profit at
the operating level.
Management' control of the
company changed in Septem-
ber last year when sharehold-
ers approved a proposal for Mr
Michael Kent, a property devel-
oper, to inject £3_74m into the
group. Since taking control, Mr
Kent has revamped the board
and has acquired Kent City
Developments, a private prop-
erty company owned by him-
self.
In his statement yesterday,
Mr Kent said that the results
reflected the cost of refurbish-
ment work and modernisation
of plant and machinery. Oper-
ating profit was £87,000
(£202,000) on turnover of
£4.96m (£4. 68m). Interest
receivable was £83,000 (£87,000
payable) but there was an
exceptional debit of £202,000,
reflecting redundancy costs of
£82,000 and directors’ compen-
sation Of £120,000.
The statement said that Kent
City Developments had made
forward property sales of some
£6m, which would make a con-
tribution of not less than £1.7m
to profits during the current
financial year. “1 am confident
that the group will achieve a
very satisfactory level of profit
for the year as a whale” said
Mr Kent, who also expected,
subject to no unforseen cir-
cumstances, a return to the
dividend list.
Olives’ shares closed
unchanged at 175p.
T&N raises
£7m through
disposals
T&N, engineering group, has
raised £7m through two dispos-
als that mark final stage of
its retreat from the European
fibre cement market, writes
Clare Pearson.
The company has sold to
Compagnie Einandere Etemit
of Belgium its 49 per cent stake
in the Irish Tegral group, as
well as its residual 49 per cent
holding in Etemit’s own UK
subsidiary. Etemit acquired 51
per cent of this company, Eter-
nic TAC, from T&N two y ea rs
ago.
These moves are in line with
a String Of small rNc prrealc of
non-core businesses recently
made by T&N.
Channel Tnnnel Inv
Shares in Channel Tunnel
Investments, one of the more
eccentric companies on the
Stock Exchange, yesterday
gained Up to I30p, on news that
Mr Henry Moszkowicz has
acquired a farther 4^300 shares,
taking his stake to 90,500
shares or 6J7 per cent
The company was founded in
2881 to develop a Channel Tun-
nel but is in no way connected
with the Eurotunnel project.
\
KLP widens its UK activities
By Clare Pearson
KLP, sales promotion
consultancy, has bought a
group of London-based market-
ing services companies for
£1.5m. The deal marks KLFs
, eighth acquisition in its cur-
rent finanrial year.
The purchase of Osborne,
the holding company for the
group, widens KLFs activities
in the UK into the fields of
advertising, market research
and public relations.
It follows a major expansion
of KLFs US operations two
months ago, when it
announced it was buying
Metro Sellger Industries, a
direct-marketing agency, and
Field Research Corporation, a
market research concern, for a
combined maximum of $25.6m
( £15 2m)
Mr Colin Lloyd, chief exeeu-
. tive. said KLP did not intend to
make a push into mainstream
advertising, but Osborne’s
strength in response-led tech-
Ratcliffs shares excited
by Bromsgrove holding
By Nikki Tait
SHARES IN Ratcliffs (Great
Bridge), brass and copper strip
manufacturer, jumped 15p to
143p yesterday on news that
Bromsgrove Industries, Bir-
mingham-based specialist engi-
neering group, had acquired
544,000 shares, or 11.62 per
cent.
According to Ratcliffs, the
bulk of the stake was bought
from Arbuthnot Latham, mer-
chant bank, which in turn
acquired it from Ley land
Growth last month.
The Bromsgrove holding was
bought at 125 3 4p a share.
Yesterday, Ratcliffs pointed
to the fact that NZI Corpora-
tion, New Zealand-based finan-
cial serivees group which is
being acquired by General
Accident, UK composite
insurer, appeared to be associ-
ated with all three companies.
NZI acquired Arbuthnot
Latham earlier this year, and
in jane announced that it held
12.15 per cent of Bromsgrove.
The GA offer for NZI follows
the auction of a 38 per cent
stake held by Sir Ron Brier-
ley’s Brierley Investments.
BrierLey, meanwhile, still has a
direct interest in Ratcliffs: the
stake, held through Industrial
Equity (Pacific) stands at
about 8J5 per cent
Bromsgrove, where no direc-
tors were available to comment
yesterday afternoon, has an
acquisitive reputation,
although it recently sold on a
small stake in Banro Industries
to Wagon Industrial Holdings;
when the latter emerged as a
bidder.
Ratcliffs, which fell into the
red in 1986, recovered to a
£425,000 profit last year.
The Ratcliff family speaks
for 54 per cent of the compa-
ny’s shares.
niques would fit in with the
requirements particularly of
KLFs financial services cus-
tomers.
The consideration is being
satisfied mainly in cash, but
jdso involves the issue of 79,884
new shares.
Osborne incurred a pre-tax
loss of £554,000 in the year to
end-June 1987, which Mr Lloyd
said was due to a number of
non-recurring factors. The
company has warranted an'
operating profit of £356,000 for
the year to end-June 1988. Its
operating companies include
Lonsdale Research, Lonsdale
Advertising, and Studio on the
Square.
Mr Lloyd said that after pay-
ing for Osborne, KLP would
have about £3m left from the
proceeds of a £9m call on
shareholders in June, and an
£8m earlier rights issue.
CAISSE CENTRALE DE
COOPERATION
ECONOMIQUE (C.C.C.E)
ECU 200.000.000 Floating
Rate Notes doe 2006
and 200.000 w a rr a nts to
•ubserfoe up to ECU
200.0004)00
7,50% Guaranteed Notes due
2006
Far tho period August 24,1088 la
N n wmBar 34.1088 ttM MMs wUI carry
an MaroK rale of 7JJ% par annum
wttn an interns amount of EOJ IMJX
par ECU 10.000 now and of ECU
1-B40J3 par ECU 100.000 note.
The r ei nv en t t n i an taf pa yment date wdl
ba Hovonwar 24. ions.
Sanqua Partau (Luxembourg) SLA.
Agent Bank
nsdol 330.000.000
Second series floating
enro-dollar rep a ckaged
assets of
The Republic of Italy
dne 1994
(Le.ra.r.1 n)
For the period August 24,
1988 to November 25,
1988 the notes will carry
an interest rate of 8 %
per annum with an interest
amount of usdol 2308,85
per usdol 100.000 note.
The relevant interest
payment date will be
November 25, 1988.
Banqoe Paribas
(Laxemboarg) S.A.
Agent Bank
Dresdner Finance B.V.
Amsterdam
DM 500,000,000
Floating Rate Notes 1985/1990
Tha Rate oMntercat appteab la to ttic
Interne Ported from August 24. 1B88 to
November 23. 1938. Indus to!* was
determined By Barclays Bank PLC. London,
as Reference Agont to t>e 5*k par cant
Per annum. Tlwrafora, on Novombw 34,
1988. tee relevant Interest Rayment Date.
Interest par Note of DM 1O0W pdndpsl
amount in the amount of DM 137.36
and interest per Note of DM 250,000 in
Ute amount of- DM 3^34.03 is due.
Frankfurt am Main,
in August 1988
Dresdner Bank
AJOiengasdtectiafl
Princtpd Paying Agent
Dresdner Sank Grou>
lO
HRGMin
expansion
of US
network
By Nick Bunker
HOGG ROBINSON & Gardner
Mountain, the London-based
insurance broking group, is
extending the US network of
its North American subsidiary.
Republic Hogg Robinson, with
two small purchases In Michi-
gan and Massachusetts.
The first deal, the acquisi-
tion of Phoenix Agency, an
independent insurance agent
based in Saginaw, Michigan, Is
part of HRGM’s strategy of
w pandiwg its US branch out-
lets by buying small to medi-
um-sized agency businesses at
a time when many indepen-
dent agents are feeling the
need for backing from larger
groups.
HRGM said it was paying an
initial 6850.000 (£500,000) for
Phoenix with a further
$450,000 payable between now
and 1992 depending on profits.
Phoenix’s 1988 pro-forma pre-
tax profits are $290,000.
The second deal is more
unusual and involves HRGM
moving from 40 per cent to 55
per cent control of Hokanson-
Anderson, a Marshfield, Mas-
sachusetts-based company
which runs a specialist insur-
ance administration business
called Group Insurance Ser-
vice Center.
It manages in-house health
insurance schemes for US com-
panies and has dose business
ties with HRGM, through
which it arranges excess medi-
cal Insurance coverage at
Lloyd’s of London and with US
insurers.
HRGM said tt will pay an
initial $125,000 for the extra
shares, with a deferred pay-
ment of $525,000 over six
years. Hokanson-Anderson’s
pro forma pre-tax profits are
$500,000.
Ansbacher boy
Henry Ansbacher Holdings,
merchant banking group, has
added a fourth offshore bank-
ing subsidiary to its network
of outlets in the world’s tax
havens.
It has bought 75 per cent of
Guinness Mahon Cayman
Trust, a Grand Cayman-based
licensed bank and trust for
£3m satisfied by £750,000 cash
and £2L25m in shares.
The Grand Cayman opera-
tion was sold to its manage-
ment by the Guinness Mahon
group in June, after a year in
which it suffered an excep-
tional loss of £1.04m on the
sale of an investment.
GRANVILLE
SPONSORED SECURITIES
Gross
Yield
Hiflb
low
Qmmv
Price
Change
dhr <p)
%
P/E
237
185
Ass. BriL Ind. Ordinary
237
+1
8.7
3.7
a9
237
186
Ass.0rlLlwl.CULS
237
+1
10A
42
40
25
Amitage and Rhodes . ..
37
0
-
-
-
57
38
BBB Design group (USM)
38
-1
2J
5.4
6.1
1M
155
Bardon Group — _ —
169
0
3-3
ZO
23.9
115
100
Baidoti Group Corn. Pref.
115
0
6.7
53
-
148
135
Bray Technologies
135
0
52
3.9
102
114
100
Bmnhlll Cam. Pref
113
0
IIP
9.7
-
287
246
CCL Group Ordinary
287
0
123
45
43
161
124
OX Group 11 % Conv. Pref
161*4
■*1
14.7
VJ
151
129
Carta PIcGD
150
0
(U
4J
92
112
100
Carta 73% Pref C5B ...._ -
noxd
0
103
9.4
305
147
George Blair —
305
0
3.7
12
8.4
%
60
bb Group —
96
+1
118
87
Jadson Group tSD — —
114 xd
0
3.4
3.0
12.6
350
245
Multi house NY (AostSB
345
0
-
-
-
111
40
Robert Jenkins
lllxd
0
75
2.4
430
124
SeruttOBS
415
0
8.0
1.9
37.7
233
194
TonJay & Carlisle — — — —
233sus
0
7.7
33
7.7
%
56
Trevlaa Holdings (USM)
BUd
+1
2.7
3.4
8.7
113
100
Unlstnit Europe Con* Pref
no
0
8.0
73
295
203
W.S rentes..-
295
0
162
55
7.9
Securities designated SO a at fUSM) are dealt in subject to
the rales and regulations of The
Exchange. Other securities llsud show are dealt la subject to the rules of T5A
These Securities are dealt In strlaly on a matched bargain bash. Neither Grenville & Co hor
Granville Davies Ltd are market makers In these securities
Granule & Co. Hd.
8 Loral Lane. Loodoa EC3K.B8P
Telephone 01-621 1212
Member of TSA
GmviHe Davies »<««>««■<
K Low Lane, Lond o n EC3R UP
Telephone 01-621 1212
Member of the Slock Exch ange &. TSA
This Advertisement is issued in
requirements at the Council of The
with the
Exchange.
The Bristol
Waterworks Company
(Incorporated in England)
Placing of 6,000,000
6 per cont C onv art lb le Re cteo mnb le Preferen ce
Shares, 1998 at El per shsre.
for the above Shares to be admitted to the Official UsL
Preference Shares wifl rank for ffividendspa/f passu with the existing
preferencoc^ritalof the Company and In priority to the ordinary
capital of the Company
In accordance with the requir em e n ts of The CouncO of The
Stock Exchange, market makers have be
i have b e en o f fered partidpe Ho n
In the marketing of the Shares.
Particulars of the Shares have bean circulated in the Extol
Statistical Services Lttt, and copies will be available, for collection
onix during usual business hours until ath August. 1988 from the
Company Announcements Office of The International Stock
Exchange. 46-50 Finsbury Square, London EC2. Copies may also
be obtained during norma business hows up to and including 31 st
August, 1888, from
Mail Marketing (Bristol) Ltd.,
Springfield House, Princess Street,
Bedmlneter, Bristol BS3 4EF
or Seymour Pierce Butterfield Ltd.,
10 Old Jewry,
London EC2R 8EA
or horn the Company's principal office,
P.O. Box 218. Bridgwater Road,
SttofBSSMO. 24th AuguO, 1888
...... . . . . ._ . ... • ' • ■ "
22
FWANCUL TIMES WEDNESDAY AUGUST » I«S
UK COMPANY NEWS
NEI ups interim payment
as profits exceed £ 18 m
By Cfare Pearson
NORTHERN ENGINEERING
Industries yesterday said it'
would increase its dividend for
the first time in five years. The
company, which this year
emerged from a lengthy pro-
cess of rationalisation during
which it shed 6,000 employees,
is lifting the interim dividend
modestly to i_8p (L65p).
The ann ouncement came at
the same time as the power
station and materials handling
supplier reported a 30 per cent
advance in pre-tax profits to
£16.5m in the six months to
end-June.
Mr Terry Harrison, chair-
man, said he was “most heart-
ened'' by the fact that, unlike
previous years, the company's
running rate of order intake
was exceeding its output Dur-
ing the first half, order intake
at £420m was up 13 per cent.
He added that he believed
the first-half improvement in
pre-tax margins from 3.7 to 5.7
per cent was sustainable. Turn-
over was down to £325.4m from
£385.4m, reflecting lower major
contract completions.
NEI was this month beaten
by GEC. its rival on the tur-
bine side, in the bidding for a
£90m turbine generator con-
tract for the Fawley coal-fired
power station, the first of three
new stations planned in the
UK.
However, it also recently
defeated rival FKI Babcock to
obtain the design contract -
from which the manufacturing
contract follows, subject to
planning permission - for two
boilers for Fawley, and will
tender for similar contracts for
the other two stations next
month.
Mr Harrison said possible
joint ventures with similar
international companies were
being kept under review fol-
lowing the recent deal through
which Combustion Engineer-
ing of the US took a 35 per cent
stake in NEI's boiler subsid-
iary.
On the electrical engineering
side, NEI recently strength-
ened its links with Mitsubishi
Electric with a deal allowing it
to manufacture under licence
circuit breakers designed by
the Japanese company.
The materials handling side
was seeing a high level of
Federated Housing rises 65%
The continuing buoyant
housing market helped Feder-
ated Housing, residential prop-
erty developer, record a 65 per
cent expansion in pre-tax prof-
its in the first half of the year.
The outcome. £2. 82m against
£1.71m. was achieved on turn-
over up from £12. 56m to
£15. 76m. Mr Peter Meyer, chair-
man, said me average sale
price of the group’s properties
was about £70,000. and despite
the steep rise in interest rates
in the past two months, he saw
no sign of a slackening in
demand for mortgages.
The interim dividend Is lifted
to 2.5p (1.7p), payable from
earnings of 18-lp (lOJp) per 5p
share.
activity, Mr Harrison said. The
design contract for equipment
to lift submarines out of the
water at Scotland’s Fas lane dry
dock had provided plenty of
work during the first half, and
the £50m construction contract
had come through since the
period end.
Tax. took £7.4m (£5.7m).
Earnings per share rose to
3.73p (2.74p).
• COMMENT
These results provided plenty
of encouragement for investors
in NEI, whose shares edged up
yesterday against the back-
ground of a falling market.
‘‘Masochistic'' is Mr Harrison's
word for the power plant busi-
ness; however, the 1990‘s are
expected to see a reversal in its
20-year decline as old plant
needs to be replaced, and as
smaller stations proliferate
under the impact of electricity
privatisation. Since it has com-
pleted its rationalisations just
as orders pick up, NEI looks
quite well-placed. Neverthe-
less, it still needs to engage In
more joint ventures to avoid
one of the bigger international
players making a bid' for it:
hence the deal with Combus-
tion Engineering on the boiler
side. A similar deal is needed
on the turbine generator side,
although profitable replace-
ment orders will provide
enough work for this division
till the end of next year. NEI
should make about £41m pre-
tax this year: the shares, on a
prospective p/e of nearly 12,
are sustained by the income
stream and could epjoy bid
Speculation as welL
COMPANY NEWS IN BRIEF
CAMBRIAN & GENERAL
Securities: Net asset value per
ordinary share on July 31 1988
was 142.01p. Capital shares
stood at 199.57p.
ENGLISH & SCOTTISH Inves-
tors: Net asset value per 25p
share stood at 133.9p at July 31
1988 (161.6p at end-July 1987
and 120.6p at January 31 1988).
Available income for half year
to July 31 £1.34m (£768,000).
Basic earnings 1.66p (0.94p) and
interim dividend 0.65p (0.55p).
EVERED HOLDINGS has com-
pleted its acquisition of Fidler
following approval at an emer-
gency general meeting.
FROST GROUP: Turnover
£25.43m (£l6-89m) and pre-tax
profits £L44m (El.Olm) for six
months to June 30. Interim div-
idend 4p (3p) payable from
earnings per share of 7.8p
(5.66p). Chairman expects fur-
ther progress in second half.
D C GARDNER GROUP: Of the
open offer of 1.53m new ordi-
nary shares in the company
made on August 1 1988 in con-
nection with the acquisition of
Chart Foulks Lynch, valid
applications have been
received in respect of 528,683
and a further 704,035 have been
placed firm.
GOLD & BASE Metal Mine,
investment holding company,
has reported net assets at the
end of the six months to June
30 of 15.49p (18p). Pre-tax prefit
rose from £31,200 to £44,700.
This was achieved on revenue
of £116.000 (£60,000). Earnings
remained at 0.32p.
LONDON & EDINBURGH
Trust subsidiary, 245 Hammer-
smith Road Investments, has
issued £35.5m of 6.625%
secured loan notes due 19%,
listed on the Luxembourg
exchange.
LONDON AND ST LAWRENCE
Investment Company is to pay
an interim dividend for the
year to the end of August 1988
of L56p (l.46p) and a special
dividend of 0.6p (nil).
TURRIFF CORPORATION,
whose interests include build-
ing construction, maintenance
services and plant hire, has
acquired Freeway Plant Sales
Limited, a company engaged in
the sale and hire of contrac-
tors’ plant, for an initial cash
consideration of £600,000. A
further payment may be pay-
able in May 1992 based on Free-
way’s average profits in the
three years to December 31
1991-
CHANNEL
ISLANDS
The Financial Times proposes to publish a Survey on the above on
Thursday, 15th December 1988
For a full editorial synopsis and advertisement details, please contact:
Brian Heron
on 061 834 9381 (telex 666813)
(fax 061 832 9248)
or write to him at:
Financial Times, Alexandra BcuMings
Queen Street, Manchester M2 5HT.
FINANCIAL TIMES
l UP 0*1 i ai/ilNllSNlWiPArf*
\
UK BANKING
The Financial Times proposes to publish a Survey on the
above on
26TH SEPTEMBER 1988
For a full editorial synopsis and advertisement details, please
contact:
DAVID REED
on 01-248-8000 ext 3461
or write to him at:
Bracken House, 10 Cannon Street
London EC4P 4BY.
FINANCIAL TIMES
tUIOH'I BUSIN! Si Ntwsurt*
OFT owns
up to error
over P&O
reference
By Nikki Tait
RED FACES and. a good deal of
puzzlement developed yester-
day morning after a surprise
announcement that the 9210m
(£I25m) acquisition by Penin-
sular & Oriental, shipping and
property gronp, of Sitmar
Cruises was being referred to
the Monopolies and Mergers
Commission.
The error was speedily recti-
fied with the Office of Fair
Trading apologising for the
error. The corrected statement
said that the Trade Secretary
“has derided not to refer” the
deal- The previous statement
omitted the “not” and yester-
day the OFT said the mistake
had come in the telex sent to
the Stock Exchange.
The Stock Exchange said
that only a handful of deals
had taken place between the
issue of the two statements
and that, after talking to par-
ties involved. It did not believe
that It would be necessary to
unscramble those trades. The
OFT, meanwhile, is consider-
ing rephrasing referral state-
ments. so that such an error -
which a spokesman could not
recall happening in the past -
is not repeated.
Southwest Resources
Southwest Resources, a
USM-quoted oil and gas com-
pany, yesterday announced the
discovery of a new field in Gal-
veston County, Texas, with
total estimated reserves of up
to 10m barrels of oil equiva-
lent
Dominion International, a
financial services company,
recently reduced its stake in
Southwest from 43 per cent to
31 per cent Southwest shares
were unchanged at 17I2P yes-
terday.
EBC rises 43% and
calls for £3.4m
EBC Group. USM-quoted
housebuilder and property
developer, announce d a 43 per
cent rise in pre-tax profits to
£1^5m against £949,000 for the
six months to June 30. The
group is also r?n* n g for about
£3.4m in a on e-for- three rights
issue and intends to apply for a
full listing .
The interim dividend is lifted
to 3.6p (2JJ2p adjusted) payable
from improved earn Logs or
l2.03p (&44p) per 50p share. '
Looking ahead, Mr David
Stoneman, chairman, said the
group’s prospects for the bal-
ance of the year were good. He
was paoticulariy encouraged by
exportations of further success
in housing and development
and from the building compa-
nies.
He added that the rights
issue, of 2.44m new ordinary
shares at I50p each, would
reduce borrowings and provide
capital for expansion.
Ex-Lands falls sharply
and cautions on outlook
EX-LANDS, investment
holding company, saw its prof-
its fall from £121,000 to £10.100
in the half year to end-June;
The directors said generally
uncertain conditions ana
reduced interest and volumes
in the market had created diffi-
culties for its share-dealing
subsidiary.
They added that If the com-
pany was to achieve earnings
to cover the 0-9p dividend paid
for 1987 conditions would need
to become a good deal more
profitable in the second half.
It was pointed out that this
had not been the case since the
b anning of the period and if
anything, there was “an
increased air of caution.” A
dividend payment would be
considered in the light of 1988
ffaptfng it.
Life Sciences sharply up
LIFE SCIENCES International,
scientific instruments maker
which changed zts name from
Phicom in May, has achieved
strong growth in sales and
profits in the six months to
June 30 1988.
The taxable result advanced
from £650,000 to SZJSm on turn-
over up sharply from £7.78mto
£19.62m. The directors are rais-
ing the interim dividend by 67
per cent to 0.5p (0-3p) on earn-
ings per lOp share of 1.8p
(0.7p).
Mr Christopher Bland, chair-
man, said Forma Scientific had
made a very good start since
joining the group, Shandon Sci-
entific had performed satisfac-
torily and IRS sales were
encouraging. Whale Scientific
and E-C Apparatus, acquired at
the end of the period under
review, would contribute to
second-half results.
CIS cots losses
After six months of
rationalisation and reorganisa-
tion OXS Group emerged with
pre-tax losses reduced from
£186,000 to £45)000 for the first
half of 1988. Turnover of this
USM-quoted inspection and
tasting services group rose 16
per cent from £4J9m to £5.68m.
NOTICE TO HOUJJERS of WARRA.VTS
m
lHIPBN CO*PO**TIO»
U.s. $ 30 , 000,000
Asahipen Corporation
Put
tha marine* of
(tha "Company") teW on 6tfi psmcutao of
an
Dated: August 24th. 1968
IKK SUMITOMO BANK, LUwnTKft
as Prinbpftl *8™*
farandonfariuilf<>(
ASAIOTEN CORPORATION
The holding company fer a group o* eonxwwajwaagoa
in construction and property development, manly the
West Country.
GROUP Unawfoodrest^ fwtto six nxwtfw ending:
pic 30 June 1M» 30 June 18*7
External turnover E2S.60M00 £26.2! 1.000
Profit before tax £1.353,000 £949,000
Earnings per share 12-°3p S 44p
DMdond per sham 3*®P 2 22v
The Gnxtf'BprDspecBOTwdtii^wBh good
indicaiions tor thebatanceol the current year. c-Wmwi
ol bosoms) by tha issua byway of right* of 2A3S, SSfi raw “timaryslwwwtWl)
M VBt«9adcn»ne«.oq^r^lorBwnf*^ B,l ^ ortl ™^5^^ ^
dbus«»s»on9S«p«inhBri9eaThecktatoKtores«dlMh#«hoW8rsjfiiod?3Aris j si *9S&
whttawprfSMlnnBfHfttaaniid^toEBCGra*
toraonanyianfcdarlStfurc^ajripubfctoWcysottap^
1888 tram
Cen0mfSteutmy.
SC Group pt. M»wfhhu^S3S»n»wftr W Ewl»r£X440iV.
Taieptwe (0382) 52273. {FmzMdw (<092)41 125$
These days, when looking at our profits, you should regard us
as a strong property development and housing group with
excellent engineering and construction capabilities .
The interim results we announced yesterday reflect this.
Interim Results
(unaudited)
6 months ended 30th June
1988 1987
Turnover
£m
551.1
£m
392.0
UP 41%
Profit
34.0
before tax
21.2
UP 60%
Earnings
per share
13.7p
8.7p
UP 57%
Dividend .
3.0p
2.5p
UP 20%
TAYLOR
WOODROW
FOR A COPY OF OUR INTERIM STATEMENT, PLEASE WRITE TO THE COMPANY SECRETARY TAYLOR WOODROW pic, 10 BARK STREET LONDON Wivann ‘
This advertisement has been approved by Touche Ross & Co. who i are regulated by the Institute of Chartered Accountants in Enriawi and
Past performance is not necessarily an indication of future performance. ‘ ana Wales.
23
FINANCIAL TTMBS WEDNESDAY AUGUST 24*1988;
CURRENCIES, MONEY AND CAPITAL MARKETS
FOREIGN EXCHANGES
Central banks subdue dollar
CENTRAL BANK Intervention
gained the upper band in cur-
rency marke t s yesterday. The
US Federal Reserve Board
Joined several European hmiw
in selling dollars, and this dis-
couraged investors from open-
ing fresh positions.
Nevertheless, the US unit
retained a fairly bullish under-
tone, and sentiment was little
affected by a 0.4 p.c, rise in US
consumer prices in July - in
line with expectations - or a 7.0
p.c. decline in US durable
goods orders in July.
However, the dollar
on a softer note at DML9065
from DM 1.9 190 and Y13&40
compared with Y134L05. Else-
where it finished at SFrU3055
from SFri.6115 and FFr6.4675
from FFr6,5050. On Bank of
England figures, the dollar’s
exchange rate index Ml from
100.4 to 1001
Sterling finishe d unchanged
on the day, improving from a
weaker start, but relinquishing
its gains during the afternoon.
The pound opened on a quiet
note, with investors reluctant
to hold aftrHwg positions ahead
of the release of UK July trade
figures tomorrow. However
this pushed sterling down to a
low of DM3.1975 against the
D-Mark, which many traders
saw as an op p or t uni ty far the
Bank of England to increase
interest rates.
This spurred fresh demand
for the pound, taking it to the
£ IN NEW YORK
day's highs. But there was no
message. on rates from the
authorities, and the pound sub-
sequently fan away to finish
unchang ed from us slightly
softer opening.
On Bank of Rw gtawd figures, '
the pound's exchange rate
index dosed at 76.1, down from
a high of 763 at lunchtime but
unchanged from the opening
JeveL Monday’s dose was 76JL
-Against the dollar, ft rose to
nSSsfrom $1.6765, but lost
ground against foe D-Mark to
DM2L2025 from DMS-2175. It
was unchanged against the
at lSL7?hut^ped
where, to. SFrZ.6975 from
SFr2.7025.and FFr108625 from
FFrO.0.9050.
In Frankfort the D-Mark
recovered against the Japanese
yen. ouenhuc and cIobm at
Y70J2S, npfiSn Y69^5 bn Mon-
day. The dollar’s weaker trend
helped the D-Mark to recover
from its record low touched on
Monday, and dealers still
regarded foe Y70.00 level as a
significant resistance point for
the D-Mark.
News of a higher than expec-
ted West German trade surplus
in June failed to give the
DMark any support, although
any benefits were probably off-
set by foe Bundesbank’s deci-
sion to leave its securities
repurchase rate unchanged at
425 px.
The French franc was a little
against. DMark in
Paris, as traders stHl expected
West German interest rates to
rise. The D-Mark rose to
FFr3L3925 from FFr03900, and
dealers' pointed out that,
although yesterday's sale and
repurchase rate was left
unchanged, the Bundesbank
stQl had an opportunity to
increase rates at tomorrow's
meeting of the central co unc il.
This could put further pressure
on the French franc as interest
differentials widen. However
there is unlikely to be any
renewed pressure within the
EMS, dealers argued, unless
the D-Mark recovers strongly
against the dollar. .
EMS EUROPEAN CURRENCY UNIT RATES
Em .
tart -
rats' .
--Qimry
'totaEu
canal
race
ASX
dhugvet
Dtitaaee
Bnft%
DuSTltae
Wky-.-iW
a xiafat
7.97749
+2.76
460
+154
-QJ2
±15344
±15404
GcnuntMtok
9HKI '
258X54
4.12
- -060
±15981
6.90403
7.05621
-0M
+0.48
±13674
DtaWlfar—
23X943
234964
430
-0.42
±15012
bWPto...
0.7757 ID
154X59
. +036
-036
±16684
±45752
i far Em tftmftM
ctatted fa Ren
FfeKUTUn.
to-23
(jfaK
flwtac
One
rrF—
pH
OJt-OJfcm
120-UBm
3.45-3.40*1
POUND SPOT- FORWARD AGAINST THE POUND
r on to |toHtotadtata«sfratfatgd^
STERLING INDEX
ftato
830
M
7U
766
950
eat
763
766
10.00
fma
763
766
1150
m
763
765
Ness
763
763
LOO
pa — —
764
763
250
pm
7 W
763
350
pa
763
763
450
pm
7U
763
(fan
W
M12J0
■uro
■iuiA
WjS - 2 iato
2367^8 I
11MV-1L74
uas-ujr»
1ILW,-Ift99%
269- 27W,
BtUHMtbl
S»A«qBL
20.94* -J0.9Sfa
269li-270fa
268
139
SSL
A®
XBZ
6.09
-1.94
0.72
LTfc
-LSb
339
ajBZ
66 7
5.97
834
T km
ooi-o. ... .
«fsr
34V .. .
5
2jn
1.46
SSL
432
2.94
3S5
6J09
-1.41
OBb
059
-L84
336
165
667
IS
hc»«wm«t(f»iim n M Kl i Jfrw W.W7AOO.Sfa-ro ^ fwwtli MU 2.Il»Ln5q»GinBrtte;
CURRENCY RATES
**23
am
SpccW*
rate
Drattai
Cmwgf
%
RHMt
(Ml
U5Do&iir™
630
0.761636
128408
0648892
159027
CvudUflS__
8J5
157912
AtstriwSdL —
172881
146281
515783
436298
950399
7.97749
rerr’TirfTP
245823
258154
■taULGolMcr...
4
277727
234964
FiCKk Franc...
RjfiMUr*
ig
833799
182156
755621
154199
•tapMoeYri-
172045
146541
NvnarKnxir-
Spcotti Pratt.
8.96718
739990
160.995
136283
Stott Kmai,
8%
839733
SbS® Franc _
2fa
256801
1.7190V
Cm*DodL_
trtrthwl-
ay.
197-004
'8.92605-
0773771
DOLLAR SPOT- FORWARD AGAINST THE DOLLAR
2H
Cte
OhhhO
H
268
-158
■L22
357
150
-033
240
-465
•221
■157
-452
059
-164
4J7
349
561
p
f OX to fatfaid are moot WS«m«rfaifa fro
zm
-165
nl35
3103
150
036
127
-43b
4.92
-121
-462
062
-173
3.93
W1S0« rw»w*Brfa*22j.^ .; S’-.-s’i-A.
currency^!^
■- toqtae bob fa far pfaffita.
Ihb.
to Mi ItaM toy «» *fa
FHncU fmac 40404050.
ufaSMlKalNMMfa
**21
761
mi
842
UZjh- ■
■ 972 •
881
1426
1U.9 .
1313
682
445
2413 .
-S3
+95
-63
■M :
+19.9
+J95
+126
-155
-212 '
+783
liSMta
Mtaita^.
*Mrt*iHMtUaa«..
■VtgtaaFrMC
DmUiXitw — _.
DcmcbcKat:-^.
Fiwdi Fra«:
r.~1tatatatataf
EWKWNRW iCY IN T ERES T RATES
7DW
llfa-U
7kw
SBc
n & na
111
UomM CwnO
1962 -ltts Bank of I _
I975-100i“Jta*e» an hrfa«32
OTHER CURRENCIES
... WOK 1900- —
Mk (Ban Amove to*9V9fa oar wn. mint.
nton;
EXCHANGE CROSS RATES
MO
‘ 1 201020-30.2430
20656-2.0685
469.10-46535
. 73420-7.5630
Gncar J 25440-25830
1265- 13000
km— 120.50*
KnrraStU J 121325.22000
.j».480M-0.4a050
67 05 -67 J5
4.4738-44850
Lur.J
S. M CF*i„.J
T«f*u_
UJLE.
3M665-3W9.50jBBl.00-
1L9200- 12.0000
'12265- 12275
274.60-276.00
*4890-46850
15L40- 233.95
70O»- 70050
70.75*
. 719.60 -7 2540
|0.28«95-03B50B
39.90-4000
266W-26W0
m
n
o
Vri
FFr.
S Ft.
HFL
Lha
D
B ft.
£
' S
i
0395
1680
1
3202
1906
ztu
1335
1056
6.464
2697
1605
xrttrt
2152
2371
1411
2566
1230
8710
39.94
0M
• YOt
0312
4.430
0525
7A77
1
1425
7017
1000.
33*2
4833
0542
1250
1129
1659
0645
9194
20.96
2986
. FF7.
SFf.
0.921
0371
1347
0623
*r;j
206.9
8331
10.
4527
2483
1
3329
1340
2U3
8791
LSQ2
0.766
6179
2458
r -HU.
Ura
0277
0.422
E 3
E 3
6216
94.77
2 T '^|
E 2
1
1325
6553
1000.
0372
0571
1836
2830
8 ^.
0.484
L490
> ' 1
tsa
5257
1618
1305
4519
1750
5387
u«
3634
1
3579
3248
100.
*StHb9MC
Yn m MOfc Frafa ft. per 10: Ua nr 1000; Befatan ft. par 100.
RNANCIAL FUTURES
Price trend boosts US bonds
US Treasury bonds finished at
the day’s high on Iiffe, recov-
ering from a weak start, follow-
ing encouraging economic
news.
A rise of 0.4 p.c. in July US
consumer prices was generally
In line with most expectations,
but the market was particu-
larly impressed with news that
prices, excluding food and
energy, rose by only 0.3 p.tL,
UFTE UK C&J FUTURE* DnMH$
following a 0.4 p.c. gain in
June.
Fears about inflation and
overheating in the US economy 1
were also allayed by a fall of 7
p.c. in July durable goods
orders.
September delivery bonds
opened at 84-15 on Ltffe, and
closed at 854)3, compared with
84-24 on Monday.
UFFE US TREASURY M
Sterling based contracts
recovered from the day’s
lows .in the absence of any rise
in the Bank of England’s
money market dealing rate.
Sentiment was also helped by
the s t rong e r US bond market,
but traders continue to fear
that any weakness in the
pound will result in another
increase in UK bank base
rates.
UFFE FF4C HKX FUTURES VDMS
Series
HO*
88
Feb. 89
Met
89
Stock
Vol
Let
Vol
Last
Vol
LM
EOLDC
S 440
25
17 TO
3
22.50
50
33
S 43350
G0LDC
S480
75
2.70
5
830 B
golop
5400
80
250
117
460
_
_
S 43310
OOLDP
5420
40
5.70
3
a
_
_
GOLD P
5500
600
>730
—
S 433-20
5CP.S8
OcL 88
No*
88
EOElWtexC
FL 220
71
1250
10
14.20
_
_
FI. 231.12
EOEIntexC
R. 223
105
9
—
•-
_
_
EOEIodexC
FL 230
552
660
20
930
_
_
FI. 23112
EOE MexC
R.235
354
430
446
630 B
E0E Index C
R. 240
234
310
30
450
5
7
FI. 231.12
EOE Index C
R. 245
111
2
70
3.70
5
EOE Index C
Ft. 250
15
050
UB
260
R. 231.12
EOE index C
R. 255
—
100
2
—
_
FI. 23112
EOE Index P
FI. 210
305
1.40
9
250
—
—
R. 23112
EOE Index P
FI. 220
180
250
177
5.40
—
_
R. 23112
EOE Index P
R. 225
210
4.70
39
730
—
_
FI. 23112
EOE Index P
R. 230
653
630 B
65
9
27
1030
FI. 231.12
EOE Index P
FI. 235
281
830
80
11.90
FI. 23L12
EOE Index P
FI. 240
162
12
60
1430 B
2
17
FI. 231.12
Strike
Dtootticmrats
PnU MlUuanB
Strike
CeOKtulemnts
CwmHIwMH
Strike
Price
88
&
Dec
660
Dec
2
Price
78
m£
647
Mar
648
Dec
17
Uar
48
JMQ
90
422
502
0
B
80
503
516
37
116
ITOQO
1140
1165
92
222
313
0
19
82
333
361
103
161
jjS
MB
739
94
22
143
0
49
B4
216
256
150
25b
140
394
96
0
45
142
151
86
119
an
253
401
0
175
98
0
18
342
324
88
44
123
414
523
|MQA
0
63
100
0
5
542
5U
90
23
57
557
657
1*9500
0
IB
Esttasted tone total, cm 766 Ws 1363
Proto dry's open lot. Crits 30565 Puts 39095
umcfsamm
05,886 tanU per ED
Estimated mfane total. Cads 60 Puis 20
Pmto day's apea tat. 1X16 1350 Pitt 1000
UFFE EUIOMUAR OPUS
Urn setts
0
0 _
0 254
360 535
860 923
1360 1378
Ftfhtttit mbsne total, Calls 3 Pau 0
Piwto A aft na U. CaDs 19 Pub L32
OBLMeiP
FI. 9750
_
f»4-
li
300
1.20
R. 9833
1 0BL Index P
FLIOO
1 96 i
250
1 L_
{ 230
250
2-60
R. 9833
UFFE SHORT 5IEKJK
SUtke
Pats-setltaBto
Strtte
Suite
Cafe-KtUsactts
Price
150
See
Oct
Sep
Oct
Price
9025
m
Dec
66
Dee
14
Ss
Dec
SB
Dec
155
1330
1330
1
17
9050
76
48
0
21
8800
42
81
13
UO
830
832
16
71
9075
52
33
1
31
25
65
21
43
165
396
468
100
207
9100
29
21
3
44
8950
14
50
35
53
no
134
220
336
459
9125
9
13
8
61
7
38
53
66
175
28
84
730
823
9150
2
7
2b
80
S3
3
28
74
81
1B0
4
26
1206
WM
9175
1
4
50
102
1
20
97
98
Esttafad ntm total. Calks 0 Pus 0
Proto day's open let Crib 752 Pots 1733
EttmUed ntane total. CNN 0 Pots 100
Proto daft cm U. Cads Z753 Puts 4249
EXJmto tow tataf. Crils 520 Pair 864
Proto dip's often loL Calls 18149 Puts 16132
PULMaPHU SE US 0P1MK
02300 [rods per £1)
_____ :e/s
02^89 (Mb poffl
Strike
Pus
Suite
Calfc-ottleaxMs
PntHritltnms
Price
1.650
1%
Oct
467
to
530
Dec
5.77
vk
Oct
1.92
mu
276
Dec
307
Prta
1650
Oct
530
to
500
Dec
630
lS)
Oct
235
to
335
Dec
435
L675
237
332
383
4.45
LB9
296
307
409
L700
L75
265
325
305
165
400
500
6.75
L7TO
138
234
235
338
303
423
5J6
608
L750
030
130
L75
235
705
B20
9.05
10.00
L725
075
144
201
231
439
507
6.76
704
1000
0+0
03®
a
L45
11.95
12.55
1335
13.90
1.750
8JS
iJ.7
137
1.92
604
7.75
836
928
1050
035
030
0.90
tfciw
1725
1705
1825
L775
SUB
(L55
0.99
L47
9J0
902
1053
mo
1.900
030
.
0J0
1170
-
-
2250
LBOO
0.05
034
065
L05
1137
1L93
1336
L950
040
-
-
0.45
1140
-
-
1700
Pmto do's npm tat: CaHs
Pmto A&i tone Cdb ;
LONDON (UFFE)
. Put* 442A44
pasirjfflo
Etatod tone total, Cto HU Pots RM
P roto iifi opts lot Cails 392 Pets 200
CHICAGO
21-YEAR Vt. N0T»UL CUT
ES4,8N32toell04%
ILL TREASURY MBS KSD *%
SUMN 32edi tf 1M%
IS
Otte
94-11
94-29
954L
Low
94-05
94-23
BUnta Votes* 16699 0642U
Pmto (fays opto to. 46468 GS63MI
7-UYEU9%WmaMLCBr
SMOOJfafcof lMtt
s
One
93-31
W* Low
Pro.
94-15
9501
hw.
9400
IS
Mar
Jn
IS
Hw
Latest
84-11
8323
84-15
83-26
Low
84-16
8328
83-10
8207 8207 8101
Pm.
8419
83-31
83-11
82-24
82®
81-22
81-07
8025
80-12
BOW
79-21
JAMM3E YEHOsaSS
YX2J0 S per Y1M
TSm
&
Ott
Mar
0.7499
03570
ar
0.7573
—tzt
0.7490
0J561
Pm.
0.7505
0.7575
a , 0 04)
Pmto day's opto taL 118 08
6% HTBHUL LOW TEH JAPANESE G8Y7.
■OKYZOta 1908 b eflM%
ILS. TREASURY 8BX5 (MO
HapNdsolin%
One Hkh
5m 10234 UgJB
Dec 10107 1QL07
EctinudVatae 640 0781
Pmto deriflpw taL 77b 0591
Low
10235
10005
Pm.
10265
ss
Uar
Jbj
S2
Dec
liar
latest
92.71
9226
9238
9205
9226
9218
9205
to
9267
9221
9214
9204
Pm.
9268
9225
9216
9206
9L97
9108
9103
THREE-HONTM EBSODQUAR (DUO
SUa peksh if 169%
1HKX RtoTH STfXUHG
£5MOM tote N 118%
dose
8^
Ue
Pfar.
Sfa
8829
8823
8833
®4£
88.47
8832
88.42
8857
Ma-
88.77
8803
88.73
8807
lta
BB07
88.93
8883
8298
&
Dec
Mar
Sep
Dec
Her
Latest
9125
90.75
90.75
9061
9050
40.40
9034
902S
9^
90.78
90.76
9061
9050
90.41
9035
9029
Low
9120
9069
9068
9034
90.43
9034
9029
9023
Pm.
9123
90.75
90.73
9039
90.48
4038
4031
9025
SWSS FRANC (06;
SFr 125JMM SperSFr
ETSSSBASta & POORS 500 UgOSC
S5M tines Mez
Est. VoL One. ftys. not down) 20634 08788)
Pmto dw^s open taL C670 (440441
FKE100MKX
£25 pir W fata peW
ffv'.n
iWiT'ui
I'n - fJ
[•T v. VI
tI
rTT-'i
htjTrj
Hi
■'7-1 :-/!
Sep
Dee
Mar
Jan
latest
256.90
25920
261.90
26450
258 jSo
260.45
26295
26550
low
256.75
25915
26L40
Pm.
25660
259.05
26165
26350
EUROPEAN OPTIONS EXCHANGE
Nov. 88
Feb. 84
M«y 84
Sep. 88
OcL 88
Nov. 88
S/FI C
FL 205
65
1020 A
2
10
_
_
FI. 214.40
S/PIC
FL210
87
5.70
10
600 A
—
—
FI. 214.40
S/FI C
R. 220
59
120
2
2 A
me
—
FI. 214 40
S/FI P
FL195
45
aio
—
—
—
—
FI. 214 40
S/FI P
R. 200
125
030
—
—
am
FI. 21440
NFIP
FI. 205
350
0.40
8
1.55
—
—
FL 214.40
S/FI P
FI. 215
101
3
12
5.40
-
-
F). 214.40
0 a. 80
Jan. 89
Ape- 89
ABNC
FL45
527
130
111
240
13
3.40
FT. 42J0
ABNP
FI. 45
60
330
314
430
10
4.90
R. 42.10
AEGON C
FI. 80
106
3
5
530
2
730
FI. S030
AKZQC
FL 140
792
5
171
830
47
1230
FI. 13630
AKZ0P
FT. 130
257
330
60
660
R. 13630
AMEVC
R. 50
44
230
2
3.80 B
9
530
R. 50.80
AM ROC
FI. 80
366
0.60
70
230
17
4
R. 7330
BUHRMANN-TC
FI. 55
208
1.90
IB
330
15
4.40
FL 5330
BUHRMANN-TP
FI. 55
55
2.90
2
3.60
FI. 5330
ELSEVIER C
FI. 60
168
230
20
360
—
—
FL 5730
ELSEVIER P
FL 60
63
4
1
5
30
8
FI. 5730
GST-BR0C.C
FI. 40
269
250
84
4
FI. 39.90
GLST-BR0C.P
FL40
95
2
3
3.40
I
430
FI. 39.90
H00G0VENSC
Fl.bO
767
3
37
5
13
630
FI. 56
H 00G OVENS P
FI. 56
450
4
55
530
—
FI. 56
KLMC
R. 35
174
160
52
330
14
430
R. 34.10
Kill P
FI. 35
85
220
13
3.40 B
7
430
H. 34 JO
KNPC
FL170
124
530
68
1030
5
L430
FI. 16530
KNPP
FL 160
86
4
5
6.70
1
9
FL 16530
NEDU0YOC
FI. 220
89
1130
I
19
R 222
NEDLLOYDP
FI. 220
16b
830
64
1430
—
—
fi -rr>
HAT. NED. C
FL65
316
1
27
210
2
330
FI. 60.40
HAT.NED. P
FL60
59
230
25
4
FI. 60.40
PHlUPSC
R.30
257
330
56
430
-
—
FI. 3260
PHILIPS P
FI. 30
10
030
8b
1.70
10
230
FL 3260
ROYAL DUTCH C
FJ. 240
1296
330
205
6.80
1
9 B
FI. 23220
ROYAL DUTCH?
FI. 230
155
630
126
9.20
U
10.80
FI. 23230
UNILEVER C
FI. 120
853
220
173
430
10
6.90
FI. 11130
UNILEVER?
FI. 110
112
330
165
630
8
730
FI. 11130
WE5SAMEHC
Ft. SB
50
130
20
4 JO
-
FI. 75.40
TOTAL VOLUME IN CONTRACTS : 31 £44
A-Asft
B-BU
C-CMI
P-Pnt
BASE LENDING RATES
Kfl
irl
tfl
K'ffei'iii-ffBi
vtN
Grfl
!■
toTTiHTffT niTB
mm
GyN
TB
^ ■!»- ' ' Ml
BtN
KrH
yfl
■■
htG
G i H
PI
■M
miM
m
■223h2322S£
iCi
^GiLl
HTH
Gyfl
TM
wyN
G|fl
M
Byfl
Gill
yl
Bank HapoaOin.M
Bank Land (UK) —
BanfcCrafiL&CMn.
BaokofQim
Baak of kriaod
Bank of Ub
Bvk of Scotland __
Bmpc Beige Ud__
BardapBuk.
Benduoart Bask PIC _
BeliaerBankAG
Fteadal & &hl Sa _
Rnt National Bad; Pk.
B Robert Fkfltig& Co. _
Robert Fmer&Ptnrs..
Gnbank
• Gidnoess Blahon
HFC Bank pic.
• BandnsBari:
Bailable & Gen to Bk,
• HID Samel
C.Hoare&Co
11
S'
12
U
n
n
ii
n
in
u
SUBdard Chartered 11
TSB U
UDT Mortgage Exp flLC
UmtedBkofKiwah 11
Doited Morahi Bank.. U
Uuitp Trssl Bank Pic 11
WestmTnEt 11
Weapac Baik Carp. — 11
Wbitavrayleida — . ll>z
YoffcbiteBask 11
H.l, v, u 1 1 . fth
rryinBBK
N’J'M. teijLi
■J22ESHSIE
Ckae
I8L40
18320
181%
18330
lew
18050
18225
afar
Etotod VbfaM MO OM
Pwitodfa* ! epee taL 108050020
Pm.
18250
18430
fijapsUt efUK
Sep
Dec
Nbr
Joe
Oase
4126
40.77
90 Jb
9062
RM
nii
90.77
40 J7
4062
Low
4120
9069
4069
4055
Pm.
4124
4036
40.75
9061
Brt.VbLttae.flss. to tom) 6824 (43187
Pmto d«r< opei taL 4UB0 (420157
US TREASURY JflNK 1%
SlM5M32to*ll0t%
£
Cbn
8583
84-15
84-00
8®
04425
Low
B4-U
84-05
tor.
84-24
84-06
8323
iw— i Y u li mf em mm
Pttito d*r*s open b*_ 7912 (B3U7
CURRENCY FUTURES
LVFKniLBIE EZSJM8 S pv£
s
Uar
Btijntrd VMne 56 (28)
Pmto bfaTtBpa taL 142(2057
Law Pm.
16785 16765
16660 16650
16580
POOHS-S (FMEBR EXCHANBD
un&
1-tntiL
16758
3 to- ML 12 -oUl
16783 16588 16450
U—IIUUIWI ll w I
%
Mir
Ulett
16826
167UB
16610
IU&
16710
i sfcin
Lew Pm.
16768 16818
16650 16706
- 16608
MONEY MARKETS
FT LONDON INTERBANK FIXING
Upward pressure
| 6 oontfa US Oottas
Hi |
otter 8% |
M sa j otfa 'si
INTEREST RATES had a
firmer tame in London. Three-
month interbank finished
unchanged at 11%'UK p.c.,
after the Bank of England teft
it* money market dealing rate
unchang ed. Earlier in the day
three-month money touched
lUHlft P-a as sterling looked
vulnerable, and speculation
Increased about a Else in UK
bank base rates.
Talk of higher' rates in the
US and West Germany, cou-
pled with fears about tnmor-
UK
tim
row's UK trade figures, leSt ^foe
market uncertain how long the
present base rates of 11 P-c.
will bold.
The Bank of England ini-
tially forecast a money market
shortage of £S50m, but revised
this to ESOttm at noon.
Assistance of £2Nm was pro-
vided when the authorities
bought bills outright before
hr*cb, hy w«y £18Sw bank
hiiin tn band g at 10% P-C4
£3fco Treasury MH» in bmad 4.
at 10% TJ.C 4 and. £9Qm local
not opwate in the market dur-
^arrssj'sst'
sury bills drained £327m. with
Exchequer transactions
absorbing £220m. These out-'
weighed a foil in the note dr-
gnlntlm «H4(np BBm to liquid-
ity and bank balances- amove
target of £190m.
The West German Bundes-
bank council meets tomorrow
' after its gnwwmw break, amid
speculation of a possible rise in -
foe discount or Lombard rates.
Call money rose to 4^5 px.
from 4JM) px. in Frankfort,
despite the offer off liquidity
from the Bundesbank, via a .
28-day securities - repurchase
agreement - tender, at an
unchanged fixed rate of 125
px.
There was some surprise,
that the repurchase rate was
not increased, and dealers
believe foe situation Is still
•highly uncertain.
The market wiltlookfor
guidance on credit policy from
foe amount of fftmns provided
at foe tender, and whether this
points to a further tightening
of the Bundesbank’s niohetaxy
stance at tomorrow's council
meeting- -. ■ ?
Funds will drain from this
market today as a PMttL 2 hri
repurchase agroeanent expires.
Tax payments have also tight-
eoefl credit oopffltiow s lecently,.
and repeated intervention by
foe Bundesbank to pjpport the
D-Mark on. the . fc
exchanges has reduced
fry in the domestic "
Tfataerta«relfaArM»Mtai to B ito d ri tttiKtogtto-matorftl«liMtoBgtaramftifnDw
to ta at tow to fl* RRRR tanks a LLOO ajL tto wortioB to Uw tola m Kadta Wtautato
aS. Bto of Trim Beta* Bto. Burnt **ta» if Ito to Uor*« tartar TfBL
MONET RATES
Treasury Bills and Bonds
(UtaKhtbnt)
10
W.1
NrtJitoM ta w fau .
Owe mama
Ttaowwtt
Three oonflL.
637
6.74
7.40
Tbratrewr — .
ntrjexr
866
B-94
, OIK
flwejear
Taijea
832
873
Wger
30j*r
933
939
‘ ' "
B3
MEM
FI
*90-560
i»5ji
810430
7V7fa
530-435
SMS
Bfa+Bfa
5.00
635
Uta.
;
liaifa
m
iS
■ratot
w
7V7fa
*vw.
-
PBBBB
BHBG
■■■■
■■
mmomm
LONDON MONEY RATES
OvcnfaM
_{ 10 fa
Ufa
ig|fflSSSS!d.
7 rtv
notice
Ufa
Ufa
Moot*
Sfe
Uotoi
OM
Year
j Joty.29, 1988.
. h llUWpx^ !«c6em«
H * Hi: U66 PA. ItataSnTai* far pertoS juU 33968 u Joly24 .1468. Scheme IV&V:
10311 px. Local tohortty and nuance Homes ^ aqUcg. to m iwb days’
.gg^aaascsEa
Prtpwta Wta faYtadi S per cwk.
X't'PZ
Adjourned Meeting of Warrant Holders
THORN EMI pic
(Rcgtacrcd in England Nol 229230
Bonds due 1992
(the “Warrant HoldosTand tbe“Warrants" respectively)
In accordance with the terms and conditions of the Instrument by way of
Deed Roll dated 14 January 1967, notice is hereby given that a Meeting of
Warrant Holders mil be held at the offices of Rowe & Maw, 20 Black Fnars
Lane, London EC4V 6HD on Thursday. 8 September, 1988 at 9.00 am., far
the purpose of consid e ri ng and, if thought fit, passi ng the following
Resolution winch will be proposed as an Extxaoniinaxy Resolution:
EXTRAORDINARY RESOLUTION
THAT this Meeting of the Holders of the Warrants issued with the
£60,000,000 7%% Bonds due 1992 (the “WarramsT) of THORN EMI pic
("tire Company”) now outstanding constituted by an Instrument by way of
Deed PoU dated 14 January 1987 (the "Deed RxT) executed between the
Company and Banque Indosucz Luxembourg ftire Bank") hereby >
(1) generally and unconditionally authorises and gives consent to the
Company at any time and from time to time to make market purchases
(withm the meaning of Section 163(3) of the Companies Act S65) on Tire
International Stock Exchange of the United Kingdom and the Republic
of Ireland Limited of Ordinary Shares of 25p each in the capital of the
Company for cancellation suiweet to and in accordance with any authority
from time to time granted by Resolutions of its shareholders PROVIDED
THAT:-
{a) the ma ximum price per Ordinary Share on any exercise of the
authority is not mere than 5 per cent, above the average of the middle
market quotations taken from The Stock Ex ch ange Daily Official Lett
for tire ten business days prior to making any purchase; and
(b) tbenranmnn grice forany purchase is 25p being the nominal value of
(e) the price in each case wiD be exclusive of any corporation tax payable
by me Company and/or e xp e n se s ;
(2) sanctions and approves each and every modification, abrogation or
variation of the provisions of the Deed roll and of the rights attached to
the W arran ts and each and every compromise or arrangement in respect
of tire rights of the Warrant Holders as is or may be involved in the
implementation of any such purchases and cancellations; and
(3) authorises the Bank and/or the Company to concur in, execute or do any
document, act or thing necessary to give effect to such authorisation,
consent, sanction and approval of each and every such modification,
abrogation, compromise or arrangement.
Dated 24
S8S
4 Ten tendon Street,
London WIA2AY
BY ORDER OFTHE BOARD
Tfcresa Prichard
sofa letter dated „.
j off the proposed purchase by the Company of its own I
s are available for collection, and copies of the Deed Pall constituting
the Warrants axe available for inspection by Warrant Holders in each case
during normal business hours on any weekday (excluding Saturdays and
pubtic holidays) at the offices of Rowe&Maw. 20 Black Friars Lane, London
EC4V 6HD and tbs specified offices of Bankers Trust Company set out
bdow, op to and urrinmitg the date of the Meeting and ar the Meeting itself.
As indicated in that letter, the Company is seeking authority from its
Ordinary Shareholders, holders of the ILS per cent- Cu m ula t ive Preference
Stares, and of the 7 pet cenL Convertible Redeemable Second Cumulative
P ref e r e n ce Shares 1992/99, in ter alia, to make market purchases of rroto7-5
per cent, of its issued Ordinary Share capital, r e p re sen t in g 20,748^02
Ordinary Stares, subject to the price 1 initiations set out m the above
Extraordinary Resolution.
Shareholder authority will, if granted, expire on 30 September. 1989.
However; it is the Board’s present intention that the ne cessary resolution to
renew (he authority wiD be proposed at the 1989 Annual General Meeting
and relevant Class Meetings. The Deed Poll p rovides that such purchases
require die consent of the Warrant Hokleis ty Extraordinary Resolution. So
as rorcticw tire Company of the ad min ist r ative burden of convening farther
mert'mjg* of Vftmant Holders, the consent contained in the above
Extraordinary Resolution will not require annual renewal hut mil be valid
until redemption of the Warrants in 1992, subject to there not bring any
mateririissueofOidmarySharesintiiemiervemiigperiodL 1
Implementation of tire proposed power to purchase the Ordinary Shares
of the Company shook! not adversely affect the rights of the warrant
Holders to subscribe for Ordinary Shares. The Directors bdieve that any
purchases of Ordinary Shares which were to be made tinder the authority
would be beneficial to the Warrant Holders byreason of the i mprovement in
their subscription prospects. On 30 June 1988 (the latest practicable date
before the printing of the Chairman's letter referred to above) the middle
market quotation for an Ordinary Share derived from The Stock Exchange
Daily Official List was 6S7p. If the proposed authority were to be exercised in
full at the share price on 30 June. 1988, Shareholders Funds would be
reduced by £136315,687.
QUORUM AND VOTING
At the adjomned Meeting two or more persons present in person holding
Warrants or voting certificates or being proxies (whatever the number of the
Warrants so held or represented) shall form a quorum and shall have the
power to pass any resolution and to decide upon all matters which could
properly have been dealt with at the first Meeting bdd on JO August. 1988
had a quorum been present at that Meeting.
The Extraordinary Resolution, if duly passed. wQ] be bindme on all
Warrant Holders whether or not they are present or represented at the
Meeting and whether or not they voted in favour. To be passed, the
Extraordinary Resolution requires a majority consisting of not less than
three-fourths of the votes cast m respect of it, whether on a show of hands or
on a poll. '
A Warrant Holder wishing to attend and vote at the Meeting in person
must produce at the Meeting a valid voting certificate issued by the Bank
relative to tire Warrants) in respect of whiebne wishes to vote.
A Warrant Holder not wishing to attend and vote at the Meeting m
to the person whom he wishes
1 instruction (on a block voting
A. or Morgan Guaranty Trust
Company of New York, Brussels Office, (as an operator of the Euno-CJear
System) at the addresses set out below) appointing a proxy or instructing the
Bank to appoint a proxy and to attend aim vote at tire Meeting in accordance
with his instructions.
Each block voting instruction should be deposited at the Head Office of
the Bank (the address of which is set out briowj or at such other place as the
Rank shall designate or approve not less than 24 hours before the time
appointed for bolding the Meeting at which the proxy named in the Mock
voting instruction proposes to vote and in default me block voting instruction
shall not be treated as valid unless the Chairman of the Meeting decides
otherwise before such Meeting or adjourned Meeting proceeds to business.
Warrant Certificates may be deposited with (or lo the order of) the Bank,
far the purpose of obtaining voting certificates or block voting instructions,
appointing proxies until 48 hours before the time fixed for the Meeting but
not ihercaiten Warrants so deposited or held will be released to concur with
the first to occur of:
(i) the conclusion of the Meeting or any adjournment thereof,
or if a voting certificate has been issued
(3) the surrender of the voting certificalefs).
or ifa block voting instruction has been issued
(m) upon the surrender, not less than 48 hours before the time for which
die Meeting is convened, of the receipt for each such warrant
c e rti fi c at e which is to be released to the Bank, coupled with notice
thereof being given by the Bank to the Company.
It should be noted that voting certificates or block voting instructions
which have aireadybeen obtained or isued in relation to the first Meeting
on 10 August, 1968 will remain valid for the purposes of voting at the
Every question submitted to the Meeting shall be derided in the first
instance by a show of hands and hi the case of equality of votes the Chairman
of the Meeting shaD. both on a show of bands and on apoH.havea casting
vote in addition to the vote or votes (if any) io which the Chairman of the
Meeting may beentitled as a Warrant Holder or asa proxy
THE BANK
Banqne indosoez Ijmm faoa rg, 39, Affix: Scheffer, L-2S20 I.mtmhonrg,
At tenti o n: Coupons Do mi c i le s .
Bankers Unst Company, Dxshwood House, 69 Old Broxf Street, London
EC2P2EE.
CE3)ELSA*67 Bonlevtnl Grand Dochesse Charlotte, Lmtembonrg-VlBe,
Luxembourg.
OPERATORS OF THE EURO-CLEAR SYSTEM, Morpm Guaranty
That Company of New York, Brussels Office, 1000 Rue de fa Rggeace,
B-1040 Brands, T ' '
i
24
5®3hi4s,i, *<&
27 41 10J
- a* -
3J UU2
1 7 34Z16
75 04 453
1 5 0.4 44.4
it xo i*i
33 26 21(5
47 01 <a%
3.4 17 JIB
31 34 »0
22 2.4 234
10 2 1 110
- 37 -
13 7.0 12.1
7.1 2.4 66
87 U 171
2.7 4.4 «JJ
« 31 *
21 143
3J It »3
1.4 6 3 14.1
2.0 30 14.1
- 57 _ -
20 Afi 136
31 31 0.2
6.2 13 1U
3.7 1.7 166
32 1J 111
"4 3J 44. 1
1 40 262
1 0 4 17.7
1.1 3*12,1
0.3 62 -
5.0 11 21.8
• 2.7 6
• 62 *
liam
dim
*3 3 316.0
2 oi 5.911.9
2.(117 9
3.M 23 13.9
3.3 1425.9
M 27j 6
25} 3-i}l28
2fl 3.314*
4J2.U «
17 62U10I
24 5.1 10.4
4 12 •
21 5.6 8.3
20 4.1 03.61
6.2 11 18.0
4 60 •
2 7 3 6 U.X
72 3.3 103
1.4 63 136
27 3 0 16.5
3 2 23 166
3.4 3 4 11.4
3 0 26 13.0
3 1 22 11.4
4( 38 53
- 23 -
3( 31 13.4
3 5 0.7 421
3.5 27 113
* 3.4 *
- 3.4 -
55 16 14.7
2.1 4.0 122
13.4 0.4 23.8
24 3.0 HUB
2.0 4.0 13.8
6X 1.6 127
- 87 -
23 33 14.0
3.7 3.5 1.7
2.0 32 14.4
4.5 13 235
7 6 1.5 9.6
3.1 2.0 20.6
23 4.0 127
* 27 •
4 3.1 »
27 23 180
2JB 3.215.1
14 82 128
21 3.7 148
22 67 187
- 4.0 -
- 43 -
2.1 3.C 20.1
- 42 -
2.1 6.7 92
U *A M3
23 7.4 35
15 OX 88
- 35 -
- 5.6 -
- 5.2 -
1.0 §j 34.6
12 6X 16.1
1* 63 1*5
2.4 4j 155
I t 5.1 1*8
H SJ 9
IX 4.4 178
44 27 61
2£ 4J 164
cover relates to previous dividend or forecast.
4 Merger bid or reonpnlsatlon In progress
0 Not comparable
♦ Same I me rim; reduced final and/or reduced earnings
Indicated
f Forecast dividend; cover oc earnings updated by latest
Interim statement.
j Cover allows for conversion of shares not now ranking for
dividends or ranking only for restricted dividend,
t Cover does not allow for shares which may also rank for
dividend at a future date. No P/E usually provided.
L Np par value
Fr. Belgian Francs. Fr. French Francs 55 Yield based on
assumption Treasury Bill Rale stays unchanged until maturity of
stock, a Annualised dividend, b Figures based on prospectus or
other offer estimate, c Cents, d Dividend rate paid or payable on
part of capital, cover based on dividend on full capital, e
Redemption yield, f Flat yield, g Assumed dividend and yield, ft
Assumed dividend and yield after scrip Issue. J Payment from
capital sources, k Kenya, m Interim higher than previous total, b
R ights Issue pending q Earnings based oo preliminary figures, s
Dividend and yield exclude a special payment- f Indicated
dividend; cover relates to previous dividend. P/E ratio based on
latest annual earnings, n F orec ast , or estimated annualised
dividend rate, cover based on previous year's earnings, v Subject
to local lax. x Dividend cover In excess of 100 times, y Dividend
and yield based on merger terms, z Dividend and yield Include a
on prospectus or other official estimates for 1988-89. fi Assumed
dividend and yieM after pending scrip and/or rights Issue. H
Dividend sod yield based on prospectus or other official estimates
for 19B9. K Dividend and yield based on prospectus or other
official estimates for 1987-88. L Estimated annualised dividend,
cover and P/E based on latest annual earnings. U Dividend and
S leld based on prospectus or other official estimates for 1988. N
Ividend and yield based on prospectus or other official estimates
for 1987. P Figures based on prospectus or other official
estimates for 1987. a Gross. R Forecast annualised dividend,
cover and p/e based on prospectus or other official estimates. T
Figures assumed. W Pro forma figures. Z Dividend total to date.
Abbreviations: d ex dividend; m ex scrip Issue; «r ex rights; a ex
all; tf ex capital distribution.
REGIONAL & IRISH STOCKS
The following is a selection of Regional and Irish stocks, the
latter being quoted Id Irish currency.
SKBSStd Ad Arnotu.
Butt "3
HalllR.tH.1.
IRISH Helton Hldgs .._.y
TMc service Is available to erety CSmoany dealt la oc Stock
Fvthunga throughout the United Kingdom fora fee of £940 pel
man for each security
30
FT-ACTU ARIES SHARE INDICES
Iliese Indices are the Joint miip BgH ow of the FfaneU Times,
the hsfifaife of Actuaries aid the Faculty of Actuaries
FINAN CIAL TIMES WEDNESDAY AUGUST 74 198ft
OPTIONS
EQUITY GROUPS
& SUB-SECTIONS
(Opening index 1820.8; 10 am 18203; 11 am 18213; Noon 1813 3 ; 1 pm 1814.2; 2 pm 1816.6; 3 pm 1815.8; 3 JO pm 1815.8;4 pm
t Flat yield. Highs and lows record, base dates, values and constituent changes are published la Saturday issues. A new list of constituents
is available from the Publishers, The Financial Times, Bracken House, Cannon Street, London EC4P 4BY, price 15p, by post 32p.
• First Dealings Aug 22
• Last Dealings Sep 29
• Last Declarations Nov 24
• For settlement Dec 5
For rale Indications see end at
London Share Service
Stocks favoured tor the call
included Maitay, MortoBt Capital,
TRADmOHAL OPTIONS
Aug 22 London Internationa], Standard
Sep 29 Chartered, Dunton Group, Eagle
ns Nov 24 Trust, Stormgard, J- Jarvis, Bri-
Dec 5 tannia Arrow, OH. Bailey, BuB-
7s see end of era, Rea Bros, and Cttygate. A
rice put was arranged In Bristol Chan-
tor the call . net Strip, while a double option
loriofc Capitol, was transacted In Sears.
67 - I 4
47 55 10
30 37 I 28
23 Total Contracts 23.755 Calls 15,154 Puts 8,601
FT-SE Index Calls 2241 Puts 2187
TOYOTA [TMCC|
MOTOR
CREDIT
CORPORATION
Toyota Motor Credit Corporation
Can. $100,000,000
10°/o Notes due 1991
J.P. Morcan Securities Ltd.
Merrill Lynch International & Co.
Union Bank of Switzerland (Securities) Limited
Bank of America International Limited
Bankers Trust International Limited
BNP Capital Markets Limited
Credit Lyonnais
Daiwa Europe Limited
Dresdner Bank Ajctiencesellschaft
McLeod Young Weir International
Morcan Stanley International.
Salomon Brothers International Limited
SBCI Swiss Bank Corporation
Investment banking
Tokai International Limited
LTCB International Limited
Nomura International Limited
Wood Gundy Inc.
Bank ofTokyo Capital Markets Group
Banque Bruxelles Lambert S.A.
Chase Investment Bank
Credit Suisse First Boston Limited
Deutsche Bank Capital Markets Limited
Ham bros Bank Limited
. Mitsui Finance International Limited
The NIkko Securities Co„ (Europe) Ltd.
Sanwa International Limited
Shearson Lehman Hutton International
Westdeutsche Landesbank Girozentrale
21m June, 1988
These securities are not registered under the Securities Act ofl933 and may not be offered,soldanldaend
in, or to nationals or resident of the United States:This announcement appears as a matter of record only.
NEW ISSUE
AH thae securities having been sold, this announcement appears as a matter of record only.
August. 1988
TOYO SUISAN
Toyo Suisan Kaisha, Ltd.
(Incorporated with limited liability in Japan)
U.S.$100,000,000
4 Vi PER CENT. GUARANTEED NOTES DUE 1993 WITH WARRANTS
TO SUBSCRIBE FOR SHARES OF COMMON STOCK OF TOYO SUISAN KAISHA, LTD.
unconditionally guaranteed as to. payment of principal and interest by
The Mitsui Bank, Limited
ISSUE PRICE 100 PER CENT.
The NIkko Securities Co., (Europe) Ltd.
Mitsui Finance International Limited
ANZ Merchant Bank Limited -
Credit Lyonnais
Daiwa Europe limited
Klexnwort Benson Limited
LTCB International Limited
Merrill Lynch International & Co.
Norm dtnlgn International Limited
J. Henry Schroder Wagg & Co. Limited
Tokai International Limited
Goldman Sachs International Corp.
Baring Brothers & Co., Limited
Dai-khi Europe Limited
IB J International Dmiigj
Lombard, Odier International Underwriters S.A.
Maruman Securities (Europe) Limited
Mito Europe Limited
Salomon Brothers International Limited
Sumitomo Fin a nce International
Tokyo Securities Co. (Europe) Limited
Westdeutsche Landesbank Girozentrale
U ‘
^j/i
Fresh slide leaves FT-SE down 14.4
London markets were given
another thorough yes'
■terday as the latest data on the
economy - the second quarter
*ox»s domestic product (GDP)
Ogive - was seen as further
evidence of overheating in the
UK economy. Sentiment was
add ition ally unsettled by the*
emergence of sustained MUfag
pressure in the gilt-edged mar-
i
1
n-
Mng IB
fol
*te«
&oO \
l«vr -
Bmv »
*«a
l "* ip**"
•tel*
tiwso
* TT «K« W
Step as
Oet W
tees mp Mk
■ KMIrn
announcement of Hw second
quarter gross domestic prod-
uet(GDP) figure. The 1.3 per
iiber
have been undermined by sus-
tained selling of futures instru-
ments.
The FT-SE Index of 100 lead-
ing shares opened on a week
note, down some 3X5 points,
and moved progressively lower
during the morning trading:
session. However, after show-
ing a toss of 19 points at worst,
the Index rallied to close a net
14.4 down at 1317.9.
***** uuvuut 1U V4ur
ties came in the wake of the
latest fall in the Dow Jones
Average and the weakness on
the Toyko market.
Selling pressure in London
was.ndd to be thin - “never
any more than persistent and
irritating during early -trad*
tag”, according to dealers —
hut gathered pace alter the
cent rise in the GDP xumu
was interpreted by one senior
economist with a leading DEL
securities house as in d ica ting
“unsustainably rapid growth”.
Most City economists had been,
expecting GDP growth of
around 1 per emit.
The GDP aniMmtMwngnt arid
an erratic performance by ster-
ling triggered a wave of market
speculation that another DEL :
interest rate rise could be on
the cards. The market response
was immediate At least two
major UK securities houses
were keen seders of an equity
market which was also said to
Traders and analysts
stressed, however, that the
recent weakness in equities.
haw *»iwn piaq» against a back-
ground of appallingly low lev-
els of business. “These really
are dog-days; many fund man -
agers refuse to read anything
significant into the latest nunn
hers, and they prefer to wait
and see the impact of the
rate rise and the hike in mort-
gage rates before taking any
strategic decisions". SEAQ
turnover yesterday came rat at
319.2m shares, well up on Meal-
day’s dismally low figure. HOW-
ever, fewer than half a dozen of
the FT-SE 100 constituents
dosed higher on the day.
Tim gilt-edged market, how-
ever, was looking decidedly
uncomfortable - “labouring” as
one dealer put it. There were
ominous signs in the form of
heavier trading, with one US
house reporting, “plenty of
seUing from European sources,
who are only now beginning to
display extreme nervousness
about sterling with the July
trade figures looming up".
The opinion in the market
was that the tirade deficit for
July could come out on the bad
side of Elfin. Short-dated gilts
were down around % whQe at
the longer end of the market
faTIn wfamim to 4.
FINANCIAL TIMES STOCK INDICES
Aug
23
Allfl
22
A«0
19
Aufl
18
Aug
17
Year
Ago
1088
High Low
Sines Compilation
High Low
Government Secs
87.64
B7ftZ
87 JK
87.76
57.76
8029
9143
(18/4)
88.97
(13/1)
127.4
(B/1/35)
40.18
(3/1/75)
Find interest
97.16
87 M
97.61
87 JB
87.72
rye aa
9867
(25/5)
94.14
(W1)
105.4
(28/11/47)
SO .53
(5/1/75)
Ordinary
1480.1
34772
1484^
14702
14703
17805
1514.7
(are)
13400
(S/2)
1026.2
(16/7/87)
49.4
<2ftW40)
Gold Mine*
194.6
1943
1803
1B7a
1801
424J2
312-5
(7/1)
1874)
(18/8)
734.7
(15/2/83)
435
(26/10/71)
OnL M. Yield
Earning YM Kffull)
P/E RadotNMAfA)
488
11.7S
1038
4.62
1T.BB
1044
4.60
T1.BO
1048
4.62
11^8
1044
461
11^8
1044
328
aoi
1034
•
SJE. ACTIVITY
Indices Aug IB Aug 22
SEAQ Barge] ns(Spai) 20554 20077 20955 10,823 10954 33.813
Equity Turnovor(£m)t - 828.77 844.82 78863 75050 89061
Equity Bwoainst - 21,7m 21397 21.133 21.029 45.993
Sham Traded (ml)t - 234.6 328JB 3123 267.0 3013
•Opgnog *10 ul
14665 14666
DAY’S HIGH 14606
611 an. *12 pot #1 ul
14663 14626 14636
DAY’S LOW 1462.1
• 2 pm.
14646
• 3 pm #4 pm.
14642 1406.1
Gilt Edged Bargains
Equity Bargains
Equity Value
5— Day average
Gilt Edged Bargains
Equity Bargains
Equity Value
96.1
141.1
1268.9
1033
tVL5
1707.6
104.1
1408
141 93
1053
144.4
14173
Basle 100 Govt Sees 15710/26. Fixed bit 1028. Ordinary 1/7/35.
Gold Mines 12/WS5. SE Activity 1974, * NH 1027 t Excluding intra-market
• London Report and latest
Share Index; Tel. 0398 123001
Doubts
on leisure
offer
jMS«'8hanrsi Index
SEAQ
Turnover by votwna (mWon)
AN ATTEMPT by Pleasurama,
■' the leisure group, to steal the
thunder of bidder Mecca Ld-
sure back-fired yesterday when
its half-year figures failed to
> inspire. The shares closed a
penny down at 24%) as volume
slowed to a trickle. Pleasurama
was apparently trying to
- ' upstage Mecca whose delayed
revised bid terms and formal
‘ offer document were thought
immine nt
Pleasurama’s profits of
£22£m were 38 per cent better
than last year, with all divi-
" sious showing growth. Mr Roy
Owens, leisure analyst at bro-
- ker Kitcat & Aitken, is fore-
casting £63m for the whole
,«• . year, potting Pleasurama on a
p/e ratio of Just over IS. After
. meeting with the company yes-
’7~ terday, he noted, “We will need
- Mecca's revised terms before
we can work out any implied
T" earnings dilution for Mecca. It
- is hard to see how the bid for
Pleasurama can succeed."
Mecca shares dosed down 2 at
ir I98p.
Analysts were agreed that a
credible counter-bidder might
... yet appear, but as one com-
mented. “on the basis of its
figures and growth prospects,
. — — Pleasurama deserves to remain
independent for the moment."
1930 3
.Aug
Aug_
China Clays higher
The disclosure that Brieriey
Investments has taken a 424
per cent stake In English
China Clays (EEC) drove the
shares higher as the market
assessed the longer term impn-
cationsof the move.
The shares stood out a g ains t
the generally dt*h backgjronnd
with a rise of 18 te 477P, after
touching 485p at best. Trading
volume at 4.6m shares was well
above average for the sto ck.
Analysts and dealers con-
sider ECC as now being “in
play" as a takeover target, bat
expressed doubts that the New
Zealand group would make a
full offer. Brieriey la well
known for taking strategic
stakes in major companies as
an investment. RTZ and Ban-
son head the short Ust of possi-
ble predators for ECC.
Bryant Group, in which ECC
was left holding a stake of Inst
over 29 per cent after an mbor-
five hid for the company, edged
up 4 to 142p. One sugg e stio n
was that EEC may return with
a fresh offer for Bryant In
order to stave off possible pred-
ators. BZW. the securities
house, t hinks there is consider-
able upside potential in ECC
shares, which optimistically it
values at 750p, depending an
the group’s day reserves.
Taylor Woodrow up
Interim figures some 60 per.
cent higher at £34m pre-tax
compared with £2L2m from
Taylor Woodrow, came at the
top end of analysts* estimates
and were well rece iv ed by the
market In another day of low
volmnes^ome l.6m Taylor
Woodrow - shares changed
hands with the price resisting
the general downwa r d trend to
close near the day's best of
563p,up&
BZW, the securities house,
has upgraded its fhQ year pre-
tax profits forecast for the
group from £9k5m to around
£lOQm. SBGE Savory IflQn is a
little more conservative with
its estimate of £95m.
BZW believes that any signif-
icant share price improvement
in the short-term is largely
dependent on interest by P &
O, which recently purchased a
stake of &5 per cent in Taylor
Woodrow, giving rise to specu-
lation about the possibility of
an o u t righ t bid.
.International stocks were
‘ redeemed by a minor rally in
afternoon trading, but. still
passed a miserable day as deal-
era worried about Interest
rates. Ebons hogged the lime-
light, feffing 7 to 238p as 4.8m
shares changed hands. Dealers
said a line of LSm shares had
beep offered early an -a flurry
of trading saw JLS m s h a r es go
throilghTbe system in a 10
minute period before 9.00am.
with the l.Sm-block sold at
well below the prevailing price.
The auction of the ADR mode
equivalent of the rights issue
took place in the US: the nfl-
paid shares fell to a 34p pre-
udum, down 6, in London.
IC1 announced the likely sale
of its Silicones business to
French chemical company.
Rhone Poulenc. In lacklustre
trading of less- than 600,000
shares. Id fell 8 to 1007p, after
bottoming out at lOQJp earlier
in the day. Glaxo retreated 4 to
seep.
Hanson traded quietly before
today’s figures. Dealers said it
was depressed slightly by the
wider market Warburg Securi-
ties is forecasting £590m for
the first 9 months. .
Although oil shares followed
the market, trend to dose with
small losses, there were signs
of selective interest by the
major securities houses. With
shares in British Gas doe for
listing in Tokyo next month,
the stock continued to trade
heavily on the Inter Dealer
Broker screens as marketmak-
ers prepared themesleves for
what they hope vriU prove an
increased demand from Far
Eastern investors.
Kleinwort Grieveson, the
London securities house, has
posted a strongly bullish circu-
lar on Gas to its Japanese cli-
ents, describing it as "one of
the cheapest stocks in the Lon-
don market”, and drawing
attention to its property and
upstream Investments. How-
ever, the shares slipped VA to
lfiOp.
North Sea stocks showed fit-
tie reaction to reports that
they will shortly be forced to
spend heavily on safety fac-
tors. The industry Is unlikely
to be perturbed by the sugges-
tion of an overall cost of £200m
on new safety valves, accord-
ing to one analyst
With the recent rise in Lon-
don money market rates put-
ting pressure on earnings of
the banks, there were minor
losses all round the banking
sector. Turnover was thin,
however, as Lloyds (30Qp), Bar-
day»<406p) and NatWest (538p)
NSW HIGHS AND LOWS FOR 1088
(Me. Herts
A Anwio. wan BMn. srosn M OMCS
S tages "oVGrate M i U w wt . Uneny.
auKTMCMJl « FmWm. iwm Stem.
Hoakyn*. P«0D HMD*. W.V M f m KuT.
ufq Ramktte KLSJ.
rssu— « OIRtStMtL
Fla. FNFC Mpc Of. Rd. PL, WtetMfn.
— i MMBg 09 R«dhM»tf Op. TVpa. Whtd
— ■ . ntMt (O MalMt, Sodtti petK)
l, ELECnUCALS P) Rodbne.
I (I) TACE FOODS (t)
A, Wvat, White*, 1
NWlWUnOmMIAnMlW
De La RufcCMera DO. Eng. Chine Clam,
Homey, Mmir Howard. MMJMNGB 0Q
AiMricn (ten. Ch*. Llnootn ML, UOyte
TMmsmoa, LBMKn Barr WAT. Saga
ama,wntwnftiMMWiM.Mi«
1H0HJ. W gWSF AFB HS roEwroBwnay Ptwi. .
MfW nr FKB. Mora Often**. lUwr
Waiter. PROftWTT D) BrooWnxxax,
aMFFMO (1) ToraMi taBJIMO CO ■
DanMa (SJ, M0U8TMALS (■) Baar Brand
Wii mx . Faadax Agrtcu JA Fatboton.
Maan E Za. Lawton MX. Tboarntt T-Una,
MEWBTAKin <0 PortMMMJttl & SUNL,
FAHKI p} BnmntaB On*. SufeM Upa
CM . «. Sam Cowed*. Fdoranv w Hwitne
neufbi
A Daw. MourtBalqh. Do. 5*«pc PI.
«b Eat. epc Maos. Twmua (i)
“WMA T * u «» m *S SXtSS C l
AW nw. ClayM nobafO. OlLsmtaohrt
MB.RN.ruimTiM<aMatai
. . Harriaw M^r.
00 CHA. Bnparar Mnaa.
PA, OiM Health Wim, l
Lands. Oama Am. Btdaxmar. KakuxL
Tmmaod, NsL Hons Ln. 7 *2 pc Ov. ft.
OU CO HanMnq PA. M WI (4 MoFMey
Had Laxa, Tlwee Use.
all gave up a few pence.
A sharper fall m Standard
Chartered (Slip) continued to
indicate underlying worries
about the promised rights
issue, which has yet to hit the
market.
Brewery stocks were reason-
ably steady in a nervous mar-
ket as investors respected their
defensive dualities. W«h Dis-
tillers ran 9 higher to 885p
despite the statement from Per-
nod-Ricard Indicating that it
has not purchased a stake in
the beleaguered Irish gr ou p
and has no intention of playing
the role of white knight.
Whitbread “B" shares
gained another 25 to 675p, after
700p, ftwM a Hintinning short-
age of stock. By contrast, nor-
land fell back 15 to 648p as
interest faded.
The English China Clay
developments directed atten-
tion towards De La Bue. where
Mr. Robert Maxwell holds a
stake, and amid a flurry of
activity the shares rose 15 to
491p.
Hiowden Group eased 5 to
119p as Weir Group and J.
Rothschild Holdings reduced
their joint holding to 7.83 per
cent, but A. Cohen hardened to
1050p on news that GMF
(Investments) had increased its
stake to just over 7 per cent
Nervousness over the pres-
sures for higher interest rates
as a means of curbing con-
sumer spending again lay
heavily over the stores sector.
VR Smith, at 267p, shaded by
a few pence despite recommen-
dation as a “long term boy”
from Morgan Stanley. Only
141,000 shares in the book
retailing group changed hands,
an Indication of the absence of
g w i ui ne investment interest in
the market.
Among the High Street
majors, Marks and Spencer
drifted down to !6 5Mp. Recent
support for GUS "A" shares
slackened, leaving the shares
at I062p. Sears, a&2L7m shares
traded, held at around I40p
•with dealers still seeking the
identity of the recent buyer.
There was little action in the
electronics sector - Hoare
Govett, the UR securities
house; warned clients against
Siren calls for a general re-rat-
ing which it considers unjustif-
ied.
Ferranti slipped 4% to 93V*p
as the market continued to
mull over last Friday's major
presentation in Edinburgh. At
163p, Flessey gave back some
of the ground m qdft on Mon-
day. County NatWesfs sector
analyst, Mr John Tysoe,
pointed out that Plessey is
teamed with American Texas
Instruments for a share of the
US Nato Identification System,
a programme worth a potential
*5bn.
Despite the generally favour-
able view of the marketplace,
RacaJ (316p) followed the gen-
eral trend to dose eerier. Trad-
ers ascribed tins to profit-tak-
APPOINTMENTS
Taylor Woodrow’s three
managing directors
TAYLOR WOODROW has
lted three joint managing
main board to January 1964.
Be is chairman and managing
Mr Peter Hedges was made a
director in November 1906. %
joined Taylor Woodrow Prop-
erty Company in 1066, and
became managing director in
1977, ids . present post He is
also a director of Taylor Wood-
row Developments, president
of Taylor Woodrow Property
C o mpany of America Inc., and
chairman of Taylow Woodrow
Property Holdi n gs Pty of Aus-
tralia.
Mr Walter Hagbin joined the
director of Taylor Woodrow
International. He joined the
group in 196L
Mr Tony Palmer
appointed to 13ms board In
1964. and has been a joint man-
aging director of Taylor Wood-
row Construction ainceNoveai'
ber 1986. He also serves as a
di rector of Taymech. chairman
of Taylor Woodrow Manage-
ment Contracting, and a non-
executive director of St Kathar-
ineby-tbe-Tower.
Top posts
at National
Mutual
AS*'
■ Mr WaM»P.*^Mm^who
has been with N ATION AL^
MUTUALUFE ASSURANCE
SOCIETY. Httchen,
Hertfordrirfre. . duse
kMM .mviMmI urtimivand
in vestment manager with
yM pnrwlWHty far gB li DiU tet
anci stockmarket investment*.
Be previously held the posts
of Far Eastern flmdmannggr
and fixed intspart ma nag er .
Mr Paul Downey ha* been
appointed deputy actuary*
HENRY BARRETT GROUP has
aw i pfthitaH Mr hxwm AudOMUI
Lfehove) as wwiMgiwg director
of Its rifau
skm. 1
Mr PhJBp Hawthorne (above)
>hm become ftmu* n4 plan-
ning director ef GOLA LABEB.
Be was a management consul-
tant with Price Watezbonse.
He
deputy — r —
is also on the board « a®™*™
subeBlariiBB. Mr-ym MD h^
w m m# tWu burul mVflnjXfflXXk
m Mr Trevor Davies haa been
stmointed a director of .
. oNome photographic
PRODUCTS to head the new
Iriaure divhdun. Be was a main
board director of the Thomas
Cook Group. The oosej^y is
(ring ini name to Nbbie
who has been with the Society
for as years, tobeen -
a WAHDLE STOREYS,
succeeding Mr E.V. Tbompsoa
who has resigned.
■ MgC^rMttattj -to s been^
Byfleet. Surrey, a ^edahst
health products retail chain
owned by Booker. Be was
ia«yfQ qa iy in ajM m fng director
of Candour, and since 1984
sales operationsdirector of
Currys, part of the Dixons
gmv. .
■ MBCorinneMierbnthas
SHANDWICK EUROPE. He
founded the Leslie Bishop
Group, which became part of
the Sbandwick Group In 1986.
■ Mr Alan GTOwe has been
appointed director and general
manager ofCHAKBONNEL
ET WALKER, Tunbridge
Wells, a wholly -owned
subsidiary of Barker A Dobson
Group. He was founder and
manag ing director nf
Cromweu’s Chocohdters.
■ Mr Bhdse Hudaren bus
been appointed a director of
MURRAY INCOME TODST.
■ Mr DJ. Payne hashes
, as a director. She
wasadiroctorofKIiby
ProfesrionaL s v;
■ Mr Leslie Bfrinbp has been
aj^winted a dfrectoa: of
■ Mr Hazzy Groan, formerly
operations (Hrectorttf AEtna
International, has been
appointed nan-executive
director af GROUP ALPHA.
joins tiie board of Pngh
CW"riffhiiri r
tn g anil pmininwl K nltid i of fha
TRADING VOLUME IN MAJOR STOCKS
Evans Halshaw, the mnlti-
franchised motor distributor
based in BIrmingam, produced
mid-term profits well up to
expectations and on target for
fan year estimates ranging to
flOm. Mr Keith Williams, sec-
tor researcher at BZW, is an
advocate of that figure and
recently advised clients, "the
shares offer considerable
upside potential once the the
rights issue has been digested
by the market". They edged
forward again yesterday to the
year’s highest of 348p. Jaguar
were thinly traded again »nd
eased to 271p.
WnfifioB 6 MurfJtmrt fell 13 tO
247p after announcing Its
£L3j6m offer for Catalyst Com-
munications. Catalyst shares
resumed trading to dose at 58p
compared with last week's sus-
pension price of 52p.
Leading Properties put up a
more resilient performance.
Although the tone overall
remained duTi business even-
tually became more evenly bal-
anced and Land Securities,
down to 548p at one stage,
picked up to finish only 3 off
on the day at 552p. British
Land settled only a shade
lower at 330p but Greycoat
encountered further selling
pressure and fell 8 to 411p.
Kentish Property, which has
arranged a £24m re v olvi ng loan
fedtily with Security Pacific
Merchant Bank to finance its
residential development in
London’s East End, eased 4 to
141p.
The two Tobacco majors
gave ground with BAT Indus-
tries closing marginally softer
at 428p ahead of today’s dead-
line on the conditional offer of
$72 per share for Fanners
Group of the US. Rothmans
International encountered
The following B toed on trading ftrinw for Alpta securities dealt through the SEAQ system yesterday until 5 pm.
Sunk
toUf-
oah
no
w
ns
fita
£U
to*
SCO's
Mne Onlq
OOD'i Me
BVi
Cmurn
mSUbIm™
FBfitadk 40
flam 4M
CaeuacdM at
CantOd. 2£00
urn
Ua/Snrhia.
un«.
COeiWMa- _
S SET*- **
hMudiUMw— 294
1300
135
toltfaraf 5D5
ase= ^
iMtbe 7J0I
leas DO
HOT 42b
Hatatsm — 1700
UmtoM 7ZJ
Urol Bo UU
BMSadBat 427
■xWcaBat LUO
*ea IjBO
■aOn Foods M
Pens* 70
MrlOag 197
P&B <12
ftktapo 1.400
FVKJ 1.400
PndmlM 1.0S9
toad u»
b*H 182
me »
RW IXS
tettUbta— »
todM 745
Radix), m
Rates V 514
BIZ L«l
(Mw S»
552 -3
410 -b
316 -4
300 -8
416 -3
547 -4
527 -4
166 -1
205 -3
232 -4
41# -3
fettaMSY 5U 436
IBJttSanbed UB 355
ilhanxe J77 395
633 281
SUtaJSnt*)— in 363
3M 215
-4
-3
-3
-Z'z
ScMfifenasde- S4» ^
San..
yoo
SUTqM 43b OOk
SOI 362 37V
SngbEaais 351 301
538 -7
230 -3
2fll -3
74b
470
58 -3
-1
StiUlfcsfex — uoo
JuMQAi
SoR6ns_
UN
158
137
117 511
3,900 232
199 968
96 181
bn.
18 -1
161
Ut&qk.
IMS 105
671 239
407 842
2,®» 144
316 -3
70S
475
422 tf
921 -5
417 42
436 -4
<77 -6
445 -2
137 -i
nonOB 623 649
TrabiivHN* 521 311
TnotafFortt 885 248
mnov 1,«S 267
Wfaer m 445
DMtdBtttt 297 282
MbdfcK. 57 420
Wrfcont 726 504
retta*"*- 830 299
wnmbUto— M»0 292
Wqq UOO »
Wwmrtb 591 Z74
t
4
occasional sales erf a profiMak-
ing nature and lost 4 to 4S6p.
Courtanlds went the way of
most Alpha stocks, losing 6 to
336p, while Dawson Interna- 1
tional eased to 213p after BZW
shaved its forecast of current
year profits. The new figure of
£5Z5m is still above most other
estimates and particularly
Hoare Govetfs £48m. Dawson
has sold Animal Fibres
(Bradford) to Mr Tom Ross, the
present managing director, and
Mr Mike Adams. Animal
Fibres’ merchant -like business
fails outside the mainstream of
Dawson’s operations and its
disposal is a continuation of
the group's policy of focusing
resources more sharply on its
core activities. The consider-
ation represents less than 1 per
cent of the group's net assets.
Miscellaneous financial
issues reporting six-month
profit statements suffered con-
trasting fortunes. Templeton,
Galbraith & Hansberger, the
US-based fund management
group, revealed earnings down
on the previous year, but
above market expectations and
the shares held their ground.
The news elicited comment
that the group and Mercury
Asset Management (MAM)
were the two quoted concerns
with the highest quality of
earnings, and best ability to
withstand troubled markets.
MAM shares subsequently rose
16 to 340p.
Ex-land’s interim results
were decidedly less favourable.
A warning about the dividend
payment n the adverse tr ading
conditions continue, which
seems likely , saw the shares
dip 11 to 36p. First-half revenue
was down from £91,400 to only
£7,300. Frost Group, the petro-
leum products retailer to finan-
cial services group, made scant
reply to increased half-yearly
figures plus an optimistic view
of prospects for the remainder
of the year.
A slight improvement in
turnover In the Traded Options
market showed some 15,154
calls and 8,601 puts transacted,
giving an aggregate of 23,755
contracts. There was a sharp
improvement in business in
the FT-SE index with total
turnover of 4,428 comprising
2,241 calls and 2487 puts. Trust
House Forte included a major-
ity of puts- L200 - and only 835
calls. There were 1,630 calls
and SO puts in BP while Sears
showed 1,675 calls and 69 puts.'
■ Other market statistics,
including FT-Actuaries
Share Index and London
Traded Options, Page 80
Anglo American Industrial Corporation Limited
.v iocoipcx3<c^te_lbelteput^crfS<^lhA&ica^O3ii^ianyReglEti/US<xiNq.G3AS282l06.. .
■■il ■ n f ni Meniwl
Ullillll itpOTl
The fbflowfag are the unaudited financial results of ihe corporation and its
subskSarfes far the six months ended June 30 1988, tocher wfth
correspaufing figures far the toe months ended June 30 1987 and die year
ended December 31 1987. These shouk! be n^m conjunction with Ihe
notes below:
Six Six
months m o n ths Year
ended ended ended
50&88 306.87 3LCL87
RmUUoa R million R million
Earnings &oni operations
Share of earni^s of associated companies
Dividends
Rptaffwl C^HHD£S
lnciQfl y* Oum mvcstmoits sod
Merest earned
Finance tease charges
Interest paid
Earnings before taxation
Taxation
Earnings after taxation
Otaside shareholders' intetest to earnings
of subsidiaries
SWwlwy nttrO m t ahlr m ordinary
Number of ottfinaiy shares in issue (POO)
Earnings per ordinary ahare* —cents
DMdends per ordinary share - cents
Inte rim
Final
fnr pgriorT — P milTion
RnjflBon
Group capita) emptejed-RmilHon
Gnwp borrowings- Rmdfion
*Based on weired average number of 53 622 150 ortfioaiy shares in Issue
tor tbe period.
2123
1681
3546
S45
212
473
88
63
164
43
36
63
45
27
9l!i|
44
54
69
477
329
70S
38
37
74
29
54
40
67
91
114
410
238
IMfvEl
135
52
127
275
186
465
74
54
1)9
201
132
346
53685
50828
53600
375
253
663
85
65
225
85
65
65
—
—
160
122
89
178
339
80
107
4412
4095
4126
1036
1312
1 122
L Dinngthe six months hi June 30 1988 an additional 84518 ordinary
shares hi the capita! of the corporation were issued in terns oflbe Anglo
American Group Em plo y ee Shareholder Scheme and fai terms of the
corporation's Share Incentive Scheme tor senior executives.
da d osed fa Hie latest annual report.
3- At June 30 1988 all foreign currency loans taken up by Antic's subskfiary
compa ni es were falfrcxH«edty forward exchange conOacts.
4. fa tbe period under review, rhe group has brought to account
extr a on toa iy charges of R22 roBlion Ota7-' RO- 9 ndlHoa). These relate to
the port’s share of extraordinary losses in subsidiaries and associates.
5. ^ The taxation rharff? irichxtes deferred tax prowsicins of R98mflBon
(l987:R23maikxO.
6L The South African economy performed strongly during the Bret half
although the greatest demand was concentrated in consumer related
products whilst growth in new capita! investment remained unsatisfactorily
low. The strong resurgence in world metal and commodity prices,
atxompanied by a progressive depreciation in the rand, benefited most
subsidiary and associated companies with notable performances being
recorded fayHighveld, Mondi and Boait As a result, attributable earnings
per share have increased by^ 48 per cent as compared to die same period in
1987 and the interim dividaid has beat increased (o 85 certs per share
(1987: 65 cents). Earnings lor foe year am expected to show a significant
improvement ouerl 987 although second half results will be progressively
affected by a dedine in the rate of growth in the South African economy
fallowing tt*o imposition Of tigtuer credit conditions and hightr ini port
surcharges.
For and on behalf of the board
WGBoustred. Directors
LBoyd
Interim dhriftend No 49
On Thmsday, August 18 1988, the directors of the corporation declared
interim dividend Na 49 on Ihe ordinary shares as follows:
Amount (South African currency)
Last day to register for dividend (and for changes
ofadebess or dividend instructions)
85 cents per share
Friday, September 16
to (inclusive)
Ex-dividend on The Johannesburg Stock Exchange
and on The Stock Exchange - London
Cunency conversion dare for steifing payments to
shareholders paid bom London
Dividend warrants posted
Payment date of dividend
Rale of non-resident shareholders' tax
Saturday, September 17
Saturday. October 1
Monday, September 19
Monday. September 19
Thursday. October 20
Friday. October 21
15 per cent
The fttil contfitions relating to tbe dividend may be inspected at the
Johannesburg and London offices of the coipoiattcin and its transfer
secretaries.
By order of the board
Aggto American Corporation of South Africa Limited
S e c r etaries
perDJABson
Divisional Secretory
Transfer S ec retaries
Consofidated Share Registrars Limited
1 st Floor- Edina
40 Commfssfoner Street
Johannesburg 2001
(PO Box 61051 Marshalltown 2107]
South Africa
Registered Office
44 Main Sheet
Johannesburg 2001
(PO Bax 61587 Marshalltown 2107)
South Africa
H31 Samuel Registrars limited
6 Greencoat Place
London SW1P 1PL
London Office
40Holbom Vcm±uci
L ondon BC1P 1AJ
August 19 1988
(sQSKs
_'_•- O 'SV.
• . . .• j
FINANCIAL TIMES
WEDNESDAY AUGUST 24
19S8
COMMODITIES AND AGRICULTURE
Shell forecasts a bleak
for oil prices
By Steven Butter
NOMINAL OIL prices are
unlikely to rise higher than
current depressed levels until
well into the next decade,
according to Mr John
Jennings, a group managing
director of Royal Dtrtch/ShelL
The forecast, made yesterday
at the Offshore Northern Seas
conference in Stavanger,
Norway, was regarded as the
most bearish yet delivered by
the international oil group on
prospects for oil prices until
the end of the century.
Oil analysts said they could
not recall any leading oil
company painting such a stark
picture of the future. Many in
the industry have been
expecting substantially higher
prices well before the middle of
the next decade.
However, cheap oil helps to
con tain inflationary pressures
and would benefit ail-
importing countries.
In money-of-the-day terms,
oil prices would continue to
fluctuate in a range between
S10 and $20 a barrel, implying a
decline in real oil prices.
Mr Jennings said that even
this assumed a modicum of
unity and discipline by the
Organisation of Petroleum
Exporting Countries.
He warned that recent
acquisition and exploration
activity in the industry
appeared to reflect an
unwarranted optimism about
the strength of oil prices.
Shell now believed that
world demand for oil was
unlikely to g tow significantly
during the rest of the century.
* Mr Jennings said economic
growth in the developed world
was now unrelated to growth
in oil consumption, while
investments aimed at
increasing energy efficiency
were accelerating.
Although demand was
picking up in developing coun-
tries, particularly for transpor-
tation fuels, it was unlikely
that a worldwide recession
could be indefinitely post-
poned, thus allowing little
scope for sustained growth in
demand.
Oil production, however, was
likely to continue at today's
robust levels.
Mr Jennings said the high
levels of investment in oil pro-
duction now being made in
non-communist countries
which were not members of
the Opec meant output was
unlikely to decline at least
until the end of the next
decade. Non -Opec production
has grown rapidly in the past
10 years, to about 27m barrels
a day.
Mr Jennings said such
factors put Opec into a difficult
position and postponed the day
when it would control enough
of the world market to dictate
prices and do away with its
quota system, which produced
strains among Its members.
He said: “The ceasefire
between bran and Iraq. . . may
improve prospects for Opec
cohesion but seems more likely
to add to world supply rather
than riimintah it."
He added that recent moves
by Opec members - inpJndmg
Saudi Arabia, Kuwait and
Venezuela - to acquire refin-
ing and marketing capacity in
oil-importing countries would
add to the tendency for weak
prices.
He said the oil industry
would have to cope with the
difficult price environment by
continued technical
innovation.
Brazilian ‘gold-rush’ drives
output up 24% to record level
By John Barham in Sao Paulo
ECONOMIC DISARRAY is
fuelling something of a gold-
rush in Brazil as savers battle
for protection against runaway
inflation and political
uncertainty.
The country's gold output
rose by 24 per cent last year to
a record 84 tonnes, says a
report issued by Consolidated
Gold Fields and Ourinvest, a
leading Sao Paulo gold dealer.
Mr Ricardo Eichenwald, a
partner in Ourinvest, said:
“Demand for gold in Brazil has
always been strong and has
always increased. What
happened last year was that
the trend suddenly picked up.”
Mr Peter Rich, a gold
analyst, forecast that Brazil
could become the world’s
second-largest supplier by the
turn of the century as output
fell in other countries.
However. Ourin vest’s report
said economic instability and
the exhaustion of dozens of
producing regions made
detailed forecasting hazardous.
A frenzied search for a hedge
a gains t inflat ion, now running
at 20 per cent a month, has
powered Brazilian demand for
gold. Ourinvest says gold
investments doubled last year,
to 41 tonnes.
The report said multi-
national companies, which
have to make regular currency
remittances, have bought the
most gold. Last year they
raised their holdings to 23
Gold Mine production
Brazfl (tomes)
100
Mattel shares o* non-c ommu nist
1,370 tonnes)
1981 83 85 87
9Du^;a*eianUI«MnHaSoaindOBtiBMMt
tonnes, up 248 per cent from
1986.
The Central Bank also
resumed aggressive buying
after the country suspended
interest payments on its
$121bn (£72bn) foreign debt
It increased its gold holdings
last year to 22 tonnes, from
nine tonnes in the previous
year. However, its gold
reserves were still well below
the 38 tonnes it built up in
1983.
Consolidated Gold Fields
says the bank sold a
substantial portion of its gold
reserves at the year’s end. The
bank would not confirm the
sales but operators suspect it
sold to profit from unusually
high prices at the end of last
year.
Widespread smuggling
means output figures are
speculative at best Ourinvest
says half Brazil’s 84-tonne out-
put went unreported last year.
The county’s lm gold,
prospectors are the main
source of smuggled gold. They
produce 70 per cent of Brazil’s
gold and claim they produced
96 tonnes last year, a figure Mr
Eichenwald dismissed as
hopelessly inflated.
However, brokers said they
had noticed a fall in smuggling
as local prices rose above the
international market
.• Outokumpu, Finland’s state
mining company, will mine
gold from its Saattopora
deposit Lapland, from next
January or February, Reuter
reports from Helsinki.
Al uminium
capacity
forecast
to rise
By Our Commodities Staff
THE International Primary
Aluminium Institute expects
that by June 1991 non-
communist world output
capacity for aluminium and
alumina will rise by
740.000 tonnes and 1.71m
tonnes respectively.
Its estimates suggest annual
primary aluminium output
capacity will reach 14.41m
tonnes, up from 13.G7m tonnes
at the end of last June, mainly
reflecting rises in Latin
America and Asia.
In the period rises fax Latin
America and Oceania are
predicted to lift al umin a
capacity from 32J7m tonnes to
34.68m tonnes.
Alumina output rose to
7.25Sm tonnes in this second
quarter, from 7.110m, com-
pared with 7.082m tonnes in
the second quarter of last year.
In this second quarter there
was a net flow of 12,000 tonnes
of aluminium from communist
to non-communist countries.
Exports to communist
countries totalled 2,000 tonnes,
against imports of 14,000
tonnes, bringing total
movements so far this year to
7.000 tonnes and 20,000 tonnes.
WEEKLY
METALS
AD prices as supplied by Metal
Bulletin (last week’s prices in
brackets).
ANTIMONY: European free
market 99.6 per cent, $ per
tonne, in warehouse, 2400-2450
(same).
BISMUTH: European free
market, tutu. 99.99 per cent, $
per lb, tonne lots in warehouse,
5-95-&05 (540-6.00).
CADMIUM: European free
market, min- 99.5 per cent, $
per lb, in warehouse, ingots
740-740 (740-7.70), sticks 740-
740 (740-7.70).
COBALT: European free
market, 994 per cent, $ per lb,
in warehouse, 645-7.10 (645-
7.05).
MERCURY: European free
market, min. 9949 per cent, $
per 76 lb flask, in warehouse,
315-325 (same).
MOLYBDENUM: European
free market, drummed molyb-
dic oxide, $ per lb Mo, in ware-
house, 3.42-340 (3.40-340).
SELENIUM: European free
market, min 994 per cent, $ per
lb, in warehouse, 9.65-9.75
(same).
TUNGSTEN ORE: European
free market, standard min. 65
per cent, $ per tonne unit (10
kg) WO, Cif, 51-59 (51-58).
VANADIUM: European free
market, mm. 98 per cent, VO,
cif, 5.10-5.60 (same).
URANIUM: Nuexco
exchange value, $ per lb, UO,
14.75 (same).
Hopes rise for
Chris Sberwell on the load borne
Australian coal
by a troubled industry
A N AIR of nervous
/ \ anticipation, not to say
x X hope, has appeared in
the troubled Australian coal
industry recently, and the next
few weeks should determine-
whether it is justified. ■
Most keenly awaited is a
decision from the Coal
Industry Tribunal. The
tribunal has been trying to
arbitrate a difficult, costly
dispute between the mining
companies and unions on more
flexible working practices, in
particular on ending the five-
day working-week and lengthy
Christmas shutdowns.
Also to be announced is the
outcome of protracted talks on
steaming-coal contracts with
Japanese utilities. This market
represents about a third of all
Australia's steaming-coal
exports, and hopes are high for
a jump in prices after a long
period of weakness.
Then there is - the
Government’s formation of a
coal marketing and technology
council to advise it on export
issues. The move, announced
last week, countered persistent
union Mils for a national coal
authority but left the Miners
Federation unimpressed. -
Further, changes are under
way in the corporate
structure of the industry, with
some companies leaving coal
altogether and others seeing
chances to move in or expand
their interests.
The industry is certainly in
need of good news. Since the
end of 1986, 20 mines have
dosed, 17 of them underground
in New South Wales. A total
3,500 jobs have gone, more
than n per cent of the total in
the whole country.
Industrial relations have hit
an appallingly low point.
Working-days lost in the
coalmining industry are
running at more than 40 times
the national average, after a
national strike last year and
another two this winter.
The gloom is in sharp
contrast to notable facts about
Australian coaL The country is
easily the world’s largest
exporter, with more than so
per cent of world trade last
year. Last year no fewer than
miw tonnes of 139m tonnes o£
output were exported.
Coal is Australia’s
second-biggest export after
wool, earplug about A$5.5b n
(£2.7bn) a year and m aking a
vital contribution to c uttin g
the country’s chronic current-
account deficit
Australian productivity,
moreover, as measured by
output per manshift is
actually four or five- times
greater than in the highly-
protected Tnirring industries of
japan. West Germany . and
Britain. To Australian miners'
it is ridiculous that their mines
are dosing.
That said, the country
cannot affor d the damage to its
reputation for delivery caused
by strikes and stoppages -
especially when, as in recent
years, it is tight . market
conditions which have
contributed to the Industry’s
plight.
The industry has now
accumulated losses ru n ning
into hundreds of millions of
dollars. The low price of coal,
which has suffered because of
oversupply and the phmge in
ofl prices, is only one reason.
Australia's rising costs and
high inflation rate compared
with those of competitors have
also eroded its competitive
position. Even the benefits
conferred by the ■ weak
Australian dollar in 1985 and
1986 have been erased by the
currency’s strength this year.
It is the combination of these
factors which is forcing
the industry to undergo
restructuring. The companies
have tackled the problem in
two areas.They want:
• Big reform of outdated work
practices by the mine unions.
• Cuts in freight, royalty and
other charges levied by federal
and state governments.
The tribunal’s findings are
therefore critical. It is certain
to order changes in work
practices. However, the mining
companies worry that an
attempt to arbitrate the
two positions through
(Compromise, will not be
.enough- .
The issues are sharpest, m
the underground mine® °* **
South Wales. They, having
grown u n profitable by nu nfo g
converted rapidly to so-cauad
longwall mining, that is
mechanised excavation using
the longwaBed machine, in a
change similar in impact to
containerisation of ports.
Yet, because of union
resistance, the new equipment
is only being used for about 42
per cent of available time
The companies now want
individual miners to work nine
hours a day, six days a week,
and the mines themselves to be
operating seven days a week,
52- weeks a year.
From their point of view,
anything less than a nine-hcwr
stdftwfll not be wort hwhi le.
Even an extension of rostering
arrangements already to place
in open-caste mines would also
be too costly.
The Miners Federation
leader ship, already so bitter it
is talking of breaking its
long-standing ties with the
Labor Party, is just as
adamantly refusing such
changes. The unanswered
question is whether it can
carry the rank and file.
Tbe ontcame in New South
Wales is also important for
Queensland, e v en though most
of the mines there are open-
caste and operate on a
different basis.
Those nringfi also want new
working practices to help than
cope with the difficult market.
In time, they, too, will be
driven underg ro und. There is
only one longwall mine in the
gtfltp but there will be three
next year and more later.
However, such changes in
work practices will go only
part of the way towards
helping the companies. The
companies also want
alterations to the system of
government charges. -
Far example, in New South
Wales the freighting of coal
subsidises cheap rail fares
enjoyed by Sydney’s
commuters. The companies
want freight charges cut and
dances in the way royalties
are charged.
The overall aim Is to cut
coal's costs by about ATW a
tonne, enab ling surviv ing
Australian companies to
reduce debt and compete even
more strongly against big
producers Jike South Africa
and. in future, against cheap
suppliers like China and
As for the changes in the
industry’s corporate structure,
these have been going <m in
parallel with the other
develop m en t s.
Thus, CSR. one of
Australia's biggest industrial
companies, as part of its own
restructuring sold out of coal,
mainly to Shell Australia and
Esso Australia, and out of
resources generally. ACL taken
over by BTR Nylex, sold its
coal operations to Arco of the
US.
Recently, Santos, the
Adelaide oil company, took a
in QCT Resources, the
Queensland coal group.
'Further, earlier this month
Howard Smith, an industrial
company with a 50 per cent
holding in Coal and Allied
Industries, became the subject
of a bid from Industrial Equity,
New y-Miawd entrepreneur Sir
Ron Brlerley's Australian
group. Howard Smith Is
thought to control about a
quarter of coal output in New
South Wales.
Generally the turnover of
Australian coal assets appears
to be cutting the number of
medium-sized companies,
leaving larger ones and smaller
ones.
However, the changes are
only partly the predictable
response to prospects for
changes at home and an
upturn in the export market.
They also reflect years of
exhaustion from battling for
survival. The next few weeks
will show whether the long-
awaited turn round has finally
arrived.
Currency ‘havoc’ for NZ wool industry
GOVERNMENT POLICIES
leading to high interest rates
and an overvalued currency
had wreaked havoc on New
Zealand's wool industry, Mr
Pat Morrison, chairman of the
New Zealand Wool Board, said
yesterday, Reuter reports from .
Wellington.
He said: “High interest rates
saw exporters TwfnftrriRff their
stock holdings, while the
unpredictable New Zealand
dollar has made forward
selling virtually impossible.
This has driven spinners up
the wall and out of New
Zealand wools."
Mr Morrison was speaking to
the annual meeting of the meat
and wool boards* electoral
rfwnTnittee.
He said said the industry
needed a decline in the New
Zealand dollar, now at about
6340. US cents, to 20 per cent
below its post-float peak of
72.45 :ceoti£'. C/.: 1. ' “ -■>:
However, 'he said be saw no
early fall of the
currency, because of the 1
Government's asset-sales
programme. -
Wool export value rose to
NZ$145bn (£706m) in 1987-88
(July-June) from NZfl42bn in
1986-87, allowing wool to
remain New Zealand’s second
export, Mr Morrison
Production was at its highest
level since 1980-81, although
the number of sheep fell 44 per
cent from the previous year to
64m head. However, the
board, expected a marginal
fall' in output : this
season.
The average wool price last
season was 604 cents a
kQogram (dean).
Mr .Morrison said
manutucturers had been driven
out of export markets and
skilled wor kers had lost their
jobs. ■ .
Manufactured wool exports
fell to NZ$94.4m in 1987-88.
from NZ$114. 9m in
tbe previous year, the
Wool Board’s figures
showed.
Mr Morrison said the Wool
Board hid on 31 per cent of
stock at auctions last season,
as part of its price support
programme, and bought
11 per cent, or 173,270
bales.
Board stocks stood at 93,395
bales at the season's end, up
from 62495 at the end of tbe
previous season. The holding
represented about 4 per cent of
the total dip.
WORLD COMMODITIES PRICES
LONDON MARKETS
ALUMINIUM prices on the London
Metal Exchange climbed to the highest
level lor eight weeks yesterday as
chart-inspired speculative buying was
backed up by news that Indonesia had
hailed all aluminium exports pending
contract talks with Japan. The cash
high grade prico rose $180 to $2,920 a
tonne, while the three months position
closed 590 higher at S2.765. Zinc was
firm early In the day, continuing its
upward run, but ran into profit taking
towards the end of the afternoon.
Nevertheless the cash LME quotation
closed £5 up at £803 a tonne. Coffees
recent rally ran out of steam, however,
with the November futures position
ending £18 down at £1.038 a tonne. The
market had fallen in line with New
York's overnight trend, but only traded
sideways yesterday altemoon when
New York opened stronger.
SPOT MARKETS
Crude on (per banal FOB September)
+ or -
Duoal
SI 3.20-0. SSq -0.215
Brant Blond
S14.05-4.00y -0.275
W.TI. (1 pm nil
S15.B5-5.70q -0.28
CHI product*
(NWE prompt delivery per ton m3 CIF)
+ or -
Premium Guaollna
S 162- 185
+ 1
Gas on
5130-132
-1
Heavy Fuol Oil
S60-7I
Naphtha
5137-139
+ 5
Povoiozm Argus E aim aw a
Other
+ or-
Gold (por troy ozfa
$432.75
+ 0.50
Silver iper troy oi)+
675c
+ 4
PlBlmum (par iroy oz)
$542
+ 5.S
Palladium (por iroy «)
$124
+ 0.5
Aluminium (troo maikoi)
S2805
+ 170
Copper (US Producer)
106*3-1000
+ 26
Load (US Producer)
38c
NrCfcol ifroo mnrfcot)
835c
•5
Tin (European tree market) £44?S
-IS
Tm (Kuala Lumpur tnoriiolj T0.58r
+ C.W
nn [Now York)
3446c
Zinc lEuro Prod. Price)
51275
Zinc (US Prime Wastam)
65SbC
Cattle (Irvo woigMtt
114 B4p
+ 0.11*
Sheep (dead woighQI
1G945p
+ S.44-
Pigs (live wotgM)t
67.590
+0.BS*
London dally augur (raw)
$2758
+ 1
London dally sugar (white) S2Gls
+ 2
Tale and Lyle expert price C273
+ 1
Barley (English lood)
Cite
+ 1J2S
Maurt (US No. 3 yoiiow)
£137-5*
Wheat (US Dork Northern)
El 20.25 k
-1.0
Rubber (aPOl)V
72.50p
-060
Rubber <Sop)V
7860O
-060
Rubber (Ocu V
79.00p
-o.es
Rubber (KL RSS no 1 Sop) 340 0m
•1.0
Coconut oil (PtMlipomo»)S
$5CSw
-20
Palm Oil (Malayslanft
S420y
-76
Copra (Rhllippinepffl
84)0
-56
Sovaboans (US)
$504
Canon "A' index
656c
-06
woo) lop* (64s Super)
©47p
COCOA E/lonne
Close
Previous
High/Low
Sop
899
880
899 882
Dec
870
872
875 863
Mar
8S8
859
863 852
May
868
868
871 856
Jul
880
883
885 873
Sap
889
898
896 887
Doc
829
938
935 826
COFFEE C/lon no
Cl 030
Previous
High/Low
Sap
1023
1040
1031 1010
Nov
1038
mss
1045 1024
Jon
1032
1052
1038 1Q20
Mar
1016
1028
1022 1010
May
1025
1030
1020 1015
Jlv
1020
1030
1020 1010
SUGAR (S por too no)
Raw
Close
Previous
High/Low
Oct
239.20
237 JO
243.00 236.00
Doc
238.00
235.00
230.00
Mar
227.00
22440
23060 224 JO
May
222.00
219.00
219.00
White
Close
Previous
High/Low
Ocl
239.00
256.00
260.00 254 00
Doc
255 00
254.00
254.80 253.00
Mar
255.00
25500
257.00 2514X1
May
257.00
253.00
25500 255.00
Aug
258.00
255.00
258.00 257.00
Turnover: Raw 2319 (3294) lots of SO tonne*.
White 1331 [343) .
Pans- While (FFr per tonne): Oct 1680. Dec 1655,
Mar 1ES5. May 1085. Aug 1665 Oct 1670
GAS OIL S/tonne
Close Previous Hlgh/Low
ccontsflb. r-rlnggH/kg. y-Sep. Q-OCt w-Sop/Oct
x -Aug/Sc 0- s-Sop/Oet tMcal Commission aver-
age" tatsiodk prices. * change trom a woek ago.
^London physical market 5C1F hotter dam. a|»
Bullion market dose. m-Maiayslan conts/kg.
Sep
Oct
Nov
Dec
Jan
Fob
131.50 133.2S
134.50 13575
136.50 138.00
137.75 138.50
135.00 137.00
135.25 134.75
133.50 131 25
135.75 134.00
137.00 135.75
139.00 137.50
13725 136.00
13525
Turnover 2539 (2502} lots * 100 unites
GRAMS C/tonne
Wheal
Close
Previous
HJgWLow
Sep
107.00
10665
107.00 106.70
Nov
109 65
109.60
10965 10940
Jan
112.75
112.70
11275 11260
Mar
115.2S
115.25
11565 115.00
May
118.00
118.25
118JS 118.00
Barioy
Cioee
Previous
Hign/Low
Sop
101.05
101.25
101.15 10160
Nov
10465
104.70
10465 10440
Jan
10765
10760
10765 107.70
Mar
110.40
110-20
no.40 no sea
May
112-40
112J0
11240 11230
Turnover lots ot 100 tonnea-
bOMDOM METAL BXCHAKOE
[prices supplied by Amalgamaud Metal Trading) US MARKETS
Turnover 3470 (3429} lots o« 10 umnos
ICCO indicator prices (SDRs per lonne). Daily
price Ur Aug 22: 1083.81 (1090.64) :lOday aver-
age (or Aug 23: 1121.55 (1134.05)
Turnover 4812 (3890) lota o! 5 tonne*
ICCO indicator prices (US cento per pound) (or
Aug 22: Comp, daily 111.22 (110.80); . 15 day
avorego 105.88 (10541).
Close
Previous
l-figb/Low
AM Official
Kerb dose
Open interest
Alum Mum, wurK puiBy (S per tome)
Ring turnover 6660 tonne
Cash
3 months
2905-35
2755-75
2735-45
2670-80
2880000
274000
2755-75
8648 tola
Alumiiriain686% purity (E per tonno)
Ring turnover 17625 tonne
Cash
3 months
1720-5
1584-5
1603-7
152656
1880
1590/1543
18808
1580-2
1581-2
43,743 tots
Copper, Grade A (E per tonne)
Ring turnover 33,178 tonne
Cash
3 months
1356636
1343-4
1349-50
1337-8
1388/1387
1359/1344
13808
1353-4
1347-8
63/492 lots
Copper, Standard (E per tonne)
Ring turnover 0 tonne
Cash
3 months
13006
13005
>300-5
1285-300
>3103
1310-5
31 lots
Silver (US conto/flne ounce)
Ring turnover 0 ozs
Cash
3 months
6703
884-7
uwim
683-6
8703
684-7
683-8
518 lots
Lead (E par tonne)
Ring turnover 5675 tonne
Cash
3 months
354666
38006
351-3
357-8
sv.
354*
3604)6
380-1
>1612 lots
Mcftel (S per tonne)
Ring turnover 7S2 tonne
Cash
3 months
14100200
13500-50
14200-400
13600-700
13800/13450
14150-200
1340050
13500-50
S692 lots
Zinc (£ per tonno)
Ring turnover 17600 tonne
Cash
3 months
802-4
7908
787- 8
788- 86
ear
808/795
807-8
800-1
786-7
22682 tots
POTATOES Ertonno
LONDON BULLION MARKET
haishm 80 tray oas S/troy «.
Close
Previous
High/Low
Nov
65. □
66.0
656 636
Feb
77.0
80.0
Apr
86.4
MS
966
May
105.0
1095
109.0 1066
Gold (flno oz) S price
E equivalent
Turnover 504 (480) lots Ol 40 tonnes.
SOYABEAN HEAL £/tonne
Close
Previous
High/Low
Oct
169.00
16860
17060 16560
Dec
176.10
17860
178.10
Turnover 433 (224) low pi 20 tonnes.
FREIGHT FUTURES SlOAndW point
Ctesa
Previous
High/ Low
Aug
1256
1255
1285 1252
Sep
1379
1390
1385 1379
Oct
1458
1483
1480 1455
Jan 1
1405
1495
1405 1484
Apr
1520
1525
1520 1515
BF1
1248
1844
Turnover 120 (182)
JUTE
Sepl/Oct 1868 c and J Dundee BTC 3455.
BWC5476. BTD S420. BWD S415. c and f
Antwerp BTC S45S.BWC S445.BWD 8395.
BTD $405.
COTTON
Liverpool- Spot and sh ip ment sales for the
week ended August 19 amounted to 58
mnnos against 187 tonnes In the previous
week. Trading was very low during the
week wtm only small orders made In west
African growths.
Ciote
Opening
Morning flx
'Altemoon fix
Day’s high
Day's hM
432 >2-433
433^-433*
432.70
432.60
433 h -434
432-432 »2
2S7-2S7tj
25732-258
257.024
256.432
Coins
S price
£ equivalent
Maplelaaf
445-450
265-288
Britannia
445-450
265368
US Eagle
445-450
365-268
Angel
444-449
28412-26712
Krugerrand
431-434
268-258
New Sov.
102-103
61-61*
ad Sov.
102-103 >2
81-62
Noble Plat
550.25-584.7
332-335.35
SWrer fis
p/Tine oz
US cts equlv
Spot
400.10
67366
3 months
41165
688J0
6 months
42365
70460
12 months
44560
734.45
LONDON METAL EXCHANGE TRAMB OPIUMS
AtonMum (98.714)
Calls
Puts
Strike price • tonne
6epl No v
Bapt Not
2650
205
87
2800
122
132
2950
87
224
Attanlafain (B06K)
Cal*
Puts
2700
1«
5
2850
80
37
8000
19
125
Copper (Grade A)
Calls
Puts
2160
148 187
IS 83
2250
81 134
51 128
2350
84 93
104 186
THE SOYABEAN COMPLEX began the
day with two-sided trading, however, a
combination of factors led to
commission house tong-liquidation and
local selling which, in the absence of
serious commercial buying saw the
markets dose sharply lower on the
day, reports Drexel Burnham Lambert
Expected deliveries of soyabean meal
coupled with figures showing large
stocks prompted crush selling to the
products which accentuated the
decline. Maize found early strength
against higher cash values and export
demand, but failed to hold levels as the
soyabeans fell. Wheat continued to
derivesupport tenders and export
business. Cattle underwent a
short-covering rally alter early
pressure, hogs were featureless whits
bellies rallied following a cold storage
report showing a draw-down of stocks.
Copper raided early on follow-through
buying but finished the day lower as
profittaking emerged.
New York
GOLD 100 tray 02.; S/troy oz.
. Clone
Previous
Ngh/Low
Oct
sag j
-S4&2
S48J0
53*0 . -
Jan
6466
5513
S5JL5
544 J)
Apr
G52J
S56J
8859
6554)
Jul
5582
566J
0
0
Oct
366.7
573J
0
0
HEATWCI (NL 4%000 US palls, cants/US gaffs
Latest
Previous
High/Low
Sep
‘ 4385
4473
4450
4375
Oct
'4445
4546
4S3S
4435
Nov
4620
4006
4390
4610
Dae
4000
4663
4860
4500
Jan
4635
4724
4800
4635
Fob
4800
4863
4650
4805
Mar
4460
4518
4500
4460
Apr
4300
4308
4400
4360
May
4270
4308
4290
4260
Jim
4235
4268
4286
4235
Chicago
SOYABSANS 5,000 bu min; oents/60lb bushel
Ctoaa
Previous
High/Low
Sap
807/0
841/0
844/4
806/0
Nov
818/4
851/4
856/4
816/0
Jan
822/4
852/0
858/0
822/0
Mar
821/0
847/0
B56/0
821/0
May
810/4
831/4
841/0
SUM)
Jul
801/0
820/2
823/0
800/0
Sap
724/0
733/0
745/0
724/0
SOYABEAN OH. 66000 IbK cams/lb
COCOA 10 tomeeS/tonnes
Cteae
Prevtoos Hlgh/Low
Sep
1335
1323
1«»
1320
Deo
1389
1387
1372
1354
Mar
1380
1348
1380
1345
May
1385
1363
1388
1385
Jul
1388
1383
1388
1374
Sap
1415
1408
1416
1402
Dae
1462
1443
1462
1438
Cioee
Previous
High/Low
25.01
25-52
2580
2485
Ott
25-32
25-80
28.05
Dec
25.77
26.55
Jan
28.07
28J3
2880
26-05
Mar
2045
26-83
27.25
May
28.70
27.06
27.30
Jut
28.27
28.75
2740
26J0
SOVANEAN NEAL 100 tons; S/ton
COCKE "C* sraoONs; cento/U*
Cioee
Previous
Mgh/Low
Aug
4828
4338
434.0
4323
Sep
433-5
4348
0
0
oa
438-0
437 .4
437-5
4368
Dec
4418
4438
4438
4418
Feb
4488
440.4
4408
4488
Apr
454.0
4554
0
0
Jim
4600
481.4
0
0
Aug
468.1
4878
0
0
Oct
472_3
4738
0
0
Close
Previous
HJgh/low
Sep
121,22
135 an
1Z7JS
12180
Dec
123-41
127.19
127 JO
12280
Mar
12270
12580
12680
121.75
May
12280
■104 40
12580
12200
Jul
12180
12625
12875
12400
Sep
12186
12380
184-75
T2306
Dae
11882
.12300
0
0
Close
Previous
Hlgh/Low
■ »•
286,3
2848
286.9
255J
Oct
281.2
2548
KIA
Dec
252.7
2SB.7
2838
2528
Jan
2308
2688
2508
Mar
2460
250.0
2558
245.0
■jfMjsr
2410
245-0
2400
2308
Jul
240.0
2408
2438
2348
Sap
2198
2188
2218
2148
MAIXC 6000 bu tnjn; conts/S 6ffi bushel
Cioee Ptodout Hlgh/Low
SUOA* WORM “U" 1T2JM0 lbs; cents/tba
SLVQI 5,000 troy 0£ Cttnto/troy OZ.
Ctoaa
Previous
Hlgh/Low
Aug
8738
5738
0700
8708
Sep
8748
8748
87/8
8608
Oct
8708
6798
0
0
Dec
6008
6308
8038
8838
Jan
6052 .
0
0
Mar
706.4
7062
7088
7028
May
7178
717.1
7218
7208
Jul
728.1
TOJ
7310
7280
Sap
7405
740.1
0
0
Dec
7578
7572
7820
7818
Ctoaa
Previous
Mgh/Low
Oct
1027
10.13
1082
10.14
Jan
986
■880
0
a
Mar
988
9.72
10.17
9.78
May
922
986
0-87
Jul
9.63
845
» JO
943
Oct
981
020 .
885
925
COTTON 80800; certs/lbs
Cioee
Previous
Hlgh/Low
COms 25,000 fee conts/lbs
Ckao
Previous
Hlgh/Low
Aug
10085
100.40 -
.10180
9020
Sep
10085
10080
10120
9925
Oct
9925
9925
0
0
Dec
9880
S8JS
9880
9680
Jan
9680
19875
0
0
Mar
nafio
WJ&
94JD
9280
May
9090
91.75
9200
90-75
Jul
8880-
0080
6920
Sop
80.90
8825
0
a
Dec
8500
8820
8620
9600
CRUDE OIL (Light) 42JXH US gaOa S/barrel
Latest
Previous
High/tow
oa
1581
1581
1323 ’
1620
Nov
1587
HL99
1582
1528
Dec
16.76
1609
1881
15.74
Jan
15J9
16.12 •
1603
15.79
Feb
15J9
16.13
1604
1880
Mar
1580
16.14 .
1683
1680
Apr
1580
16.15
1681
1520
May
1580
16.16
1605
1580
Jun
1008
18l17
1686
1608
Jut
1804
16.18
1684
1604
Oct SOM
Mar
May
Jul
oar
Dae
4922
40.13
4846
5040
81.18
5035
5060
8080
51.22
5245
62.70
51.20
4840
4040
■*9.75
5030
fz
Dec
Mar
Mpy
Jul
Sap
273/8
284/0
288/8
28040
283/4
270/4
277/2
286/D
290/2
291/4.
287/0
272/4
281/0
289/4
293/4
294/0
290/0
275/0
272/2
281/0
285/4
286/0
282/D
270/4
WHEAT 5800 bu min: eenta/ttKb-tashel
Ctesa
Previous
Mgh/Low
Sap
388/0
381/0
386/0
381(0
Deo
308/4
393/4
388/0
Mer
404/4
306/0
406/0
995/0
May
374/4
370/0
375/0
371/0
Jul
346/4
344/4
348/4
346/0
61 JO
81.75
48.00
4003
4828
5035
5075
LIVE CATTL E 40.000 to*
CtoaePrevtous Hlgh/Low
PRANCE JUICN15400 fee; tanN/fea
dot* Previ ew Hlgh/Low*
1»1.75 19Q40
■WM0 • 182.10
W44Q 17605
17230 T 71 JXJ
1^025 17000
18060 18060
Q 0
0 o
0 .0
Sap
19050
19125
Nov
18285
19295
Jen
173.15
17446
Mar
17180
17296
May
10085
17090
Jul
16696
«990
.Sep.
16645
16625
Nov
16645
16625
Jan
16645
16025
Oct 7037 70.70
Dta 7162 7167
W» 73.17 7267
Apr 7462 7447
Jun 73.72 7365
Aug 7160 7165
Sep 71M 7160
7062
7167
7367
74J2
7365
7165
0
7060
7165
7267
74,12
7360
7162
0
UVEHOQS 30600 lb; oentsrita
Ckaa Previous HloWLow
Ihrmccs "1
NEUTERS (Base; September 19 hbi
- 100 )
tes a
Aug ig
■nmh ago yr ago
16466
18&60
1967.5
1572.4
I Btm «*OHE® (Bate: Dec. 31 1974 „
100 )
SpM 13198
Futures 13592
13299
13631
137.19
141.79
12685
13090..
4097
4637
4096
4027
4292
4298
4295
4650
44.47
4497
44.75
405
4397
4340
44.10
4650
-1
47 90
4790
4790
4740
4620
4790
4640
4600
■> •
4660
4670
4790
4690
SQSK MaxNai 38.000 tea; cana/la
cause Pfavtova Hlgh/Low *¥•
Aug
Fab
Mar
May
Jul
teg
3695
3625
3750
' 3670
6680
5632
54-00
53-20
53.60
53.70
64.15 '
6640
5492
54.72
5545
64.02
6495
5492
6640
5498
toss
5612
5650
6227
\
Acy,
r £,
FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
$ $ 33
WORLD S
1“
6*8
D
*15
<5
-30
-if"
■i"
1-3
CANADA
TORONTO
Closing prices August 22
Qaotatlena in carta urtsss marte* 3.
11BS15AUCA M 460 4SD «- 5
ZOTOMrittriPr »% 71 71
500 AeUartdi 310% 15% 15% + 1(
1890Aanfc»E 317% 17% + %
10129 ABM Efl 515% 15% 16b
ZVSO Afina N ns% 14% »*%- %
388374 Nan *37% 363, *8%- U
•1030 A Barrie* $21% 21 21k- b
7744 AXO I I 38b B% 9%
98067 BCE Inc 136% 36b 36% + k
11450 BCE D 346 3*0 340
630 BC Sugar A $27% 27b »%- %
1*10 BOR A 310b W% 10b- %
4H3 BP Canada SIBb 18 1*
19913 Bk Mom *27% 27b 27b - b
BB031 Bk MSco» *13b «% 13b- %
400 Baton 313b ISb Ub- %
22800 Betmorrt 203 203 204- 1
300 Bambdr A Sllb 11b 11b
13000 Bemtar B Sllb 11b "%- b
S8813 Bow Valy S13b «% 13b
WUOO BmaiM 326 27 % 27 k - k
82730 Braacan A 326b 2Sb 26b- b
2SS73 Brtnrttor 480 470 476- 5
21*89 BC ForP 318b 18b M%
3220BCR* 86 88 86
1887 BC Ptoen* 327*2 27b 27b
3790 Smncor St7b 17b 17% - b
MOBrunawk Sllb lib lib- b
90260 CAE Kb 9b 9b- %
111 Hb- *»
ask-s
100 C8 Pei 318b 18%
S90QCCL Bl 33b 3b 8b
2S00CamMor 316b 15b 1#b + b
24300 Carabridg 328b 28b 28b" b
4000 Camp Raa 141 141 Ml- 2
37600 Campeau I 317% 13b 17 - b
1824 C Nor WM3 312% 12% 12% - %
4960 C Packra 5Mb M% M% + %
asumc Exprea l ids mi n»+ s
90 GG Invest $38b 38b 38%
139884 0.88 Com 3Z3H 22% 22% - %
BOO C Marconi 315b 13b 15%
2667 C OcdeoWI SiBb 16 M - %
17 1278 CP Ltd 322 21 b 21b- %
3700 C Roxy 38b 7b 7b- %
64724 CTIro A I 317b 17b 1Tb- b
2223 CUUI A I 318b 1«% 18%+ b
525 cum B Slab 13% «%
802Canamaxo 37% 7 7%+ %
2000CanamA t S7b 7b Tb + b
713S Cantor S2Sb 23 25%4 %
21850 Cannon A $11% 11b 11% - %
4100 Cam SM% M M - %
6250 Cara A 1 313% 13% 13%- %
100 Carons 331% 31% 31%- %
600 Caacadaa ss 5 5 - %
4660 CaiaMM 335% 28 28
2300 Cen Capital JlA* 11% 11%- %
113037 CooCap A *10% 9% 9%- b
4100 CanfFd A n% 8% 6% — %
1400 CMran 325 320 32a
200 Quartan SOb T3b 13%
7800 CHUM B I *17% 17% T7%
72221 Cmaplax 311% It 11% + b
B4232 ConOnco 319 M% M%- %
10850 QMapudOB 35% 5% 5%
2554 Con BaOi A 314% 14% 14%
19800 Con TVX 37% 7% 7%- %
900 Caaw Qaa »\ 24% 24%
183 CottwaJ B 311 11 11
5T5b 15b 13b + %
128% 28% 28%- b
I*a i &
! b ' SR St
UBHO 37% 7 7%+ %
Maw Saw* Mad taw Cloww Chog
600 Corny A 318 18 18
H00 Cowan 310% 10% 10% - %
200 Crown 38% 8b 6b- %
79B00 botmi A I 490 480 490 + a
seas Dwnlwoo A S5b 6b 6b
6636 DanlaoB B I ffi% 480 490 -10
800 Dorian 312b 12% 12b- b
28800 Dfckoao A I 86b 6% 3% - %
47797 Ocdaxeo 328% 28 28%*- b
321033 Domw Pots 136 134 134
37BM D TaxtBe 316 1S% 16
6353DOR4wr 312% 12% 12b- %
33200 Do Pont A *27% 27% 27%
i»io Dumb a *io% iob 10% + %
SQOE-LFln *13% 93% 53%
93831 Echo Bay 322% 22 22%+ %
12900 EntpbwA f *11% 11% 11b- %
3300 Enfield *8 7% 7%
14200 EqubySv A 35% 9b 5b
700FCAMI 88% 8% 8%
19408 FR Ud Hflb 10 10 - %
402140 Flcnlxdg *23 22% 23b- b
99700 Fwd tnd A 317 K% 16%-%
BOO Pnd Pmn *n% 11% 11%
17100 F*i Trace *6% S% 6% - %
2200 Fhwfrig L 522% 22% 22%
3200 FC«y Fin 318% 18b 18b
300 Fort Cnda *119% 110% I19%+-4%
*13? Form 313% 13% 13% - %
*750 FourSawwn ( 321% 21% 21%- %
9790 Franco O $5% 8% 8%- %
201BGWIMI $34% 24% 24%
39844 Galactic $6 3% 3
142S0 Qandrtf 37% 7% 7b- b
700 GoncUa A *18% 18% 18%
200 G TirtcO p 321% 21% 21% — %
1090 Glacnia 388 880 990
10900 Gowcorp I *7% 7b 7% - b
38530 6M KnlgW JlOb 6b 10b + %
14700 Gmhoa A I 318% 10% 10%- %
27200 Oranges 438 425 435+ 10
1200 GL Group *17 17 17
4000 CM Utaco 312% ' 12% 12%
SEOGrwytwrt *31% 23% 23%+ %
87742 Gofi Rat *17% 17% 17% ♦ b
11500 HeJoy 33% 8% *% + b
MOO Hama A $B% g% B%- %
182 Hayta D 312 12 12
*0560 HoM Ml $24 23% 23%- %
20950 Hemlo *14% Mb M%+ %
8500 HetBngr 313% 18% 13% - b
61400 Horsham f 36% 5% 5%
7000 H BayMn a 33% 8% »%- %
4145 H Bay Co *18% 18% 18% - %
33S50 linaaco L *34% 24% 24%- %
Z259B knp 08 A *64% 93% 63% - %
*36*79 Inco $35% 35% 35% - b
IMOOMdal K 9 9 - %
320 Intoad Gas *11% 11% 11% - b
99000 bmopae 18% 9b 9%
23129 Inter Oty *19% 19b 19% - %
9070 tomr txnan 347% 47% 47b + %
23700 Inti Thom *13% 13b 13b
1100 mv Grp *13% 18 13%+ b
IMS tpaco *18% 18% 18%- %
1700NWOOA1 313b 12% 13
83M Jannodt 3lS% 15b ISb
lOKoltrDA S35b 33% Kb
300 Kwr Add $20% 20% 20%
29824 Laban 321% 21% 21%+ %
73711 Lac Mnrts $13% 12 % 13 - b
600 Lafarge p $20% 20% 20%+ b
59600 LakSaw A 318b Mb Mb- b
256432 Ltldtw B 1 SIS Mb 14%-%
400 Laur Bk 310% 10% 10%
11800 Hatoy
MOO Hama A
132 Hayea D
3% 18% 18%- %
l*b 12% 13
Bate* tact High Low Ctoao Ong
400 Laur Or B 37% 7b 7b- %
SBQOLawmUA 313 13 13 - %
WOO Lob lew Co S12b 12b 12b
1800 Lonvaat 317% 17% 17%+ %
eaeoo Lunooka 486 480 450- 3&
4850 MDS A 326% 26% 28%
2S0UD6B *23 b 29b 2&b~ b
28569 Mac Kairta *36 425 <25- 10
88*01 Ucftm H X 311% 11b 11%- %
66*434 MUn HY I *10 ID 10
88999 Uacmllan 317% 17% 17%- %
40220 Magna A I 312% 17% 12%
2395 Maritime C 315% 14% 15%
1Q682 Mart. Rea a 9 9 - b
300 Me Myra *81 81 61
4240 Mammae 313% U% 13%
8900 Melall M ab 9 9
800 Mdmd Dry SB 8 8
34350 Minima *20% 20% 20% ♦ b
12500 Ml lei Carp 280 771 272- to
4982 Merten A I 325% 25% 25%- b
7774 M Truaoo *16% 19% >6%
23848 Mooro 327% 26% 26b - b
22948 Muacn ch o <20 410 415+ S
10530 KM Bk Can *10% 10% 10%
7800 N BaMnaaa 203 200 200
24334 MVGTieo $25% 2S 25%-%
W71 NewTal Enl 317 16% 17
3950 Noma A 314% M% 14%+ %
28800 Noranda F 314% 14% M% - %
153388 Noranoa 322% 22b 22% - %
5072 Norceo *19 b 19% 19%- %
7888 Ncrcfi A f *17% 17% 17%
90387 NC 09* S1B% 16% 18%
74880 Har Tat **1% 20% 20% - %
19800 Northgai *7% 7 7% - %
6*3543 Nova f 312% 11% 11%-%
1D0S0 Noverco *11% 11% 11%
5100 Nowico W 315% 15 15 - %
in Numac StOb Wb 10b + V
12800 Ocetet B I »% 9b 9b - %
*800 Onex f 313% 13 13
6897 Onax mg ab 9b 8%+ %
1890 oaan A I STOb 20% 20% - b
98800 PWA Core 320% 20% »%
4350 Pgurin A I S8b 8% 9%
10680 Pamotr a% 8% 8% - %
1150 PanCan p 324% 24% 24% - %
3900 Pogsana 315% 15% 15%
5880 PJewl A I S15b 15% 15b- %
9584 Plonaar M 37% 7% 7% - %
189835 Placer Dm 316% IB 18
16916 Poco Pet 3Mb 10 ID - %
189323 Ptttysar E *20% 20 20% - b
79975 Powr Cor t *13 12% 12% - %
45650 Powr On SU% 14% 14%- %
3133 Provloo a% 9% 9%
158450 Ranger S7« 7% 7% - %
2100 RayrocX f 18% 8% 6%
2020 RedpnSi 310% Mb 10%- %
2500 RotOnan A I 317% 17% 17%- %
10*11 Renlaanca 312% 12% 12% - %
M82S Rapap I 311% 11b 11%
16*39 Rio Algom 322b 21% 22b + %
16256 Rogore B I 352% 51% 5l%-i%
1400 Rothman 344% 44% 44%+ %
174202 Royal Bnfc Ol% 31b 31b- %
12771 RyTrco A 316 16b 16% - %
MKbSHLSym $S 7% 7% - %
M0SNCAI a 7 7
<500 Stt. CemA I 311% 11% 11%+ %
4800 Samuel XT 317 17 17
9053 Basko* ab 9% 9%
8900 Sceptre 410 400 400- S
laoOSCMMdorA 325% 25% 25%
8900 Scot Paper $17 17 17
11840 Scott I 312% 12% 12%
EDO Scotia C 313% 13% 13% - %
40095 Saogram *86% 64% « - %
B9BO Sun Can *11% 11% 11%- %
3000 Selkirk A t 324 24 24
33260 ShaU Can S«3 42% 42%-%
65492 Sherrill ab 9 9
1096 Sonora 990 390 3SO
BS255Mham 319% 19% 19% + %
207SS Spar Aaro I Slab tab 19% - %
36900 Slalnbg A f S29 29 29 -%
22821 Slalco A 524 23% 23%
3400 TCC Bov *7% 7b 7b- b
12677 Tack B f 315% 15 IS - %
64663 Texaco Can 338% a 38%
30950 Thom N A 326% 26 SB - %
268895 Tor Dm Bk *32% 32 32 - %
3400 Tor Sun 122 22 22
24800 Torenr B I *27% 27% 27%
3100 Total Pot 318% 16% 18b - %
97907 TrnAtta U 313% 13% 13% - %
39957 TrCen PL 313 12% 12%* b
110697 Triton A 317 18% 16%- %
30082 Trtmac 410 360 410+ 30
4460 TlOOC A ( *32% 32b Kb
EDO Trane B 335% 35% 35%
200 IMP A *13% 13% 13%
5957 Unlcotp A a 7% 7%- %
2500 UnigkCBB I 37S 375 378 - 6
842 Un Carttfl $18% 19% 19%- %
IMS? U Emprlao *9% 9% 9%* b
355 Un Carp 53* 34 3*
52388 Vailly C 345 335 339- 18
800 Viceroy H 37% 7% 7% .
2800 WIC B I S13% 13b 13b
1100 wtja* A Sllb lib 11%
3800 WM Fraser 318% 18% 18%
31080 Wornd E 316% 18% 16% - %
ion Weswun *10 ID W
28000 Weawn 3)2% 32% 32%-%
4G63 Ufuoowo A 446 44$ 446
in Xarm Can 317% 17% 17%- %
I- No voong ngUa or remnewa votbig
rlgMs.
MONTREAL
Closing prices August 22
200 BombcdrA *Tt%
53448 BambrdrB *11%
8675 C8 P*k *18%
27480 Caacaoes $85%
1675 CorGaOi *14%
>118 MnTIrst *18%
32389 NatSkCda *10%
12855 Noverco *11%
12150 Power Carp *13
15188 Prevlgo *09%
*5719 Royal Bank $31%
2225 SMnbrgA $20%
2320 Vtdeooon tub
Total Saloa sues than
11% 11%- %
»% H%- b
18% w%+ %
05 OS - %
14% 14%
Mb 18%
10% 10%
11% 11% - b
12% l?%- %
ob% n%
31b 31b- %
28% 28% - %
n% 11%
OVER-THE-COUNTER
Nasdaq national market. 2pm prices August 23
Sloe* Dhr. 1O0a Wo* Lota lewtoreg
na. 100a Up Low toatrhng Sion mv. MOo
Continued from page 35
pumsen .11 SO 486 22% 22% 22% + % 8Mligt 2*
PyrmT M 72 10% 10% 10% SEEO
Omax 54 208 3% 3% 3%+ b Baton! S3
OVC » ID 9% »b 9b — % SetcUna 1-24
OiwkCb S* 12 24 19b t» 19b + b Sanaor .10
Quwrtm 126 397 11% 11% 11b - b Soouant
Ouftahr a 11 35 6% 6% 6% SvcMar JOB
B R.p v SvO^k pgj
RPM B M 16 198 14% Mb Mb- b StxrMad SO
RabbiiS 13 2% 2% 2% - % BhawM L28
RadSyw.Mo U 6 9% 9b 9b Shorwy h
RaloftFS 8 56 lib 10< W%-%8hrwd*
RartmL SO 23 24 34% 34% 34% 8tgmAI JSt
Rawvaa 4» 79 8% 6% «%- b SigreO a
Rw9b« _ 21 287 28% 26% 26b- % SlfcnGr
RagfBc SOm 10 ID M% Mb 14% - % suicnVl t
Rapap J056 74 9b 8% 8%- b Stllcnx
Rapigii 28 Gb Sb Bb+ % Simp*" SO
RapAm 74 ID 8 13% 13 13% + b Siller
RaatMo JOB 16 329 10% 10 10%+ % 8mtf
RsUHaMSi 1902 24% 24 34 SCCMV U6
Raxon 10 48 0% 8% 6% + % SoctyG* *0
RayRy .78 W ID 19 18% 18%+ % SftwPb
RIOUm B7 3% 3b 3%+ % SomtSa JB
Rle*D Mr 19 6 13% 18% 18% - % SooocPd J2
M 253 28% 2S% 25%
9 53 8b 8% 8b+ %
8 77 13 13 13
5 23 ^ « «
38 SB 17% 17% 17%
10 1068 11 10% 11 + b
415 9% 8% 9 + b
10 1072 18% 18% 13% - %
1005 26% 28% 28%
828B 7% 6% 7 + %
RlefcEJ Mr IV 8 13% 18% 18% - b SooocPd J2
RchraHl.lOa 20 K 23 23 23 - % SCarW M
RtggaMI.IO 14 87 20 19% 19% - % sCalWI 202
RoadSvI.W 20 1448 29 28% 28b + b Eounac
RbtHBo __ 24 17 20b 20b 20b Soutret M
noctiCS JB 9 104 11% 11% lib Soma 1-K
Ravtlfd .100 4 T70 9, *% 8 + % Spiagsl SIB
RooaStf .16a U 2 8% 8% 8b SMMlc
RoaeB .16a 18 128 8% 8 8% SkMag M
Ro op tc K T5 21 21% 21b 21% SaSfflo 82
RouScr 168490 9% 9% 9%+ % Safflci JO
Roan .52 TO 450 21% 20% 21 - % BMoiT a
Roytpr 22 84 3 2 13-16 2 13-18- 1-18 SrwSN a
RyaoF M 952 5% fib 5% BwtnT 78
Stratus
- s-s - Strwto 1.10b
SCI Sys 13 MSB 11% 11% 11% 8Vud7y
S3 Mo 20 458 19% 10% Mb Stryker
SFFad 5 117 13 12% t2% SfeiOL Vt
3HL Sy a 1448 8% d 6 « - % Subaru
SKFAB1.73# 146 49% 46% 46% - % StfFln -10|
Safaod 71010 6% 6% e%- % Samgph
Ses«» ID 7 729 25 24% 24% + % 8umerp 56
SagHbr 2 14% M 14% + % SubBB .720
SagHbr 2 14% M 14% + % SubBB .720
Sahlan 10 201 1 1S16 1 13-18 I 15-16 SuoGrt
SUuda M ID 35% 35 35 - % SudflC
SlPau® 30 8 89 10% 10% 10% - % Suawat aL12
flUPaul a 2 8 783 42 41% 41% - % SyHMo
Sellck 17 2 13 13 13 8»«tln
Sanftd a .18 12 31 Z7% Z7 27 - % SySoOw
Scharer jn 24 641 26% ab 28% - b Symmi JOa
SchtmA M 13 25 38 351} 35%
Sdmad « 17b 18% 17 7BC a
Sctrex 8 148 6% 6 •% . tea 02
Seaoata 6 9088 9 d 8b 8%- % TC8Y 319
10 1072 16% 15% 15% - %
1095 28% 28% 28%
8288 7% 8% 7 + %
16 8S5 14% 14 14%+ %
22 1394 44 43% 43% - %
13 SES 17% 18 W% + %
17 844 14% Mb Mb
15 132 6% 8%
31 4S3 9 8% 8%- b
11 170 13% 13b 18b
M 79 17 18% 18% - %
8 T10 33b Mb 35% + %
8 849 36% SB »
7 1*8 21% 20% 20% — %
13 2024 16% 17% M%+ %
6 1» 11% 11% 11%- %
17 99 29% » 29b
9 5*1 21b 20% 21%+ %
10 40 27% 26% 27% — %
17 *7 18 17% 18 + b
M tt 21 ZD% 20%
8 823 Stb 32 32%
13 1012 9% 0% 9%— b
82 fib fib »b .
is 70 18 17b w + %
1111*7 34% 24% 24% - %
11 41 «% 19b 19b- b
17 Ifi 17 1B% 18% - b
9 105 20% 28 30 - %
45 10 M% Kb 19%
W 1207 22b 21% 22 - %
9 946 93% 33% 33%+ %
19 33 15% 15 « - %
24 89 22% 22% 22%
137 92 73% 73% 73%+ %
25S 8% 5% 6
101 8% 9% Bh+ b
8 7 11b »% «% “ %
9 133 19% 19% 19%
1W 8% 6b th+ b
8 7 11% 11% 11% - %
• 133 19% 19% 19%
M a 21% 21% 21%+ %
20 527 18b 17% 18 + %
21 41® 38 37% 37%+ b
9 12 28% 26. 2S%+ %
148 7 8% 8b- %
5 52 4% 4% 4%
21 234 19% 19 1>%+ %
22 122 30% » 30%+ %
- T-T -
9 785 11% 11% 11%
57 4 32 32 32 + b
21 800 12% »% 11% - %
TCF .Ma
IHEa
Tandem
TctOta
Tnoxn SJBa
TalcaiA
Tetocad JB
Tafaaats
Tataha
Tetxon JD1I
Tennant JB
Taradta
3Com
TMWttt
TokloF o t
Toppa a job
T ratBn a
TWA pi
Trail ua
TrtadBy
Trknod
Truajo 56
Tartep 1J0
aocnin M
TycoTy
Tyson M
USMX
UST Cp 52
un.
tWBc 1.18
UnBKp JO
Un®
unHaa mb
UoPkitr 32
UACm J4
uacoi
unEdSs
UHreC X
UHUCr
UldSvrs .72
USBcp 1
US MIC .18
US Trat 1.18
138 0 8% 8% - % IVarhm
29 938 5% 4% 5 Vartan 50b
4 15371 15-18 1 13-18 1 IS-IB-1-WVarora p
14 223 15% 15% 15%+ % Venae
11 2 148% 146% t4B% -1% VIeoip
3896 22% 22% 22% MeaMa
164 38b 37% 38 + % Vlldng
21 821 10% 10 ID Vtponl
13 Sil 12% 12% 12% Wratak
IT 2S5 17% 17% 17% - % .Volvo 152a
18 2 27 27 27 +1
28 2D 16% 15% 15% — %
221512 17% 17b n%+ % WD 40 M0a
19 29 Ztb 20% 20% WTD
87 SB 74% 74% 74% + l Wolbra .48
• 598 12% U 12%+ %
6 48 9b 9 9%+ %
52 32 31% 31b- %
13 289 22% 21% 22% + %
12 228 11% 11b 11%+ %
32 89 19% 18% »%- %
11 41 Mb 28% Mb + %
WD 40 1J0a
WTD
WalbtD .48
WaltCp 40
Warren
WBcOC 28
WtaliEn 128
WFSL U»
WMSB JO
WaBBind .12
WauaP 52b
Naxfim a
12 228 11% 11b 11%+ b WFSL 1-08
32 89 19% 19% 18% — % WMSB JO
11 41 Mb 28% M%+ % Waaalnd ^2
7 68 24% 24% 24% Waurf 52b
13 IK 18% Mb M%+ % WBxmna
T BM M% 13% M%- % WMfc nn
M 558 17% Mb Mb- % "WCap
— U— U — WatFSL .40a
« 5% 415-16 5% + 3-18 WatnPb
9 M Mb Mb «%+ % WMrtA
10 203 7 8% 7 - % Watnuk
10 1 36 35 35 WiboiC Jfl
12 ill Mb Mb M% W a t o n
8 375 22 21% 21%+ b WatwOn
8 108 2fl% 29b 2B%+ % Waa™" -»
14 22 28b 25% 28 + % Wh*T<*
29 133 28 zr% 38 + % WDyJ * 1™
385 14% 14% 14% - % WUlBfllt 120
4 2211 4% 3% 4% WillAL
fi 3 28% 28 28 - % WIMPS -20*
182 8 15-16 3% 3% — % WllmTr J4
5 40 Mb 17% 17% WlianF
a 386 24% Mb 24b- % „
1M 4% 4% 4% WlsarO JO
12 173 38 37% *7%
15 32 20 19% 30 WohCx
35 » 27% 27% 27%- % WOrtbg M
13 48 17 16% »%- % Wyman JO
23 7 21%
13 08 20%
ID 4%
Mini wb
383 «%
42B 4%
18 1 34%
33 135 15%
202 V
6 165 48%
- W-W -
13 32 31
7 382 10
19 M 31%
30 54 13
M 9 ■%
1 17
13 201 15%
8 SO 23%
8 1303 1T%
16 112 34
12 70 33
18 332 8%
17 MS 38b
» 80 10%
6 2 38
IB 401 19%
97 55 18%
1M *1%
M3 17
191582 16%
30 206 11%
16 427 26%
29 1026 23%
32 6 35%
7 X2S 4fi
b see )9%
10 M3 0%
a it w
23 8144 12%
12 3956 17%
123 1220 15%
8 69 14%
2G8 11%
IS 518 22%
13 1122 14%
UnTalav 35 » 27% Wb 27b- % vwmg a * is »ia a
tMWFr .IS 13 48 17 1B% M%- % Wyman JO 13 1122 14
UnvMt 192 478 8% 5% 6%
UrwSvg JO M 7 23% 23b »%+ b • -X-Y-Z-
- V-V - XL Dt a M 176 *
V Band la 3 03 11b W% M%+ % XOUA 7M t.
MSt 81 70 8b 8% 8%- % X-BSa x 12 217 H
VM SR » 47 14 13b 13%- % Hcor 15 T70 |
VWR JO II US Mb 17% M - % XMax 2629 1
VsfiQLo 31 774 6% 5% 5% Xyloglo 7 30 £
VaFBL IS 80 M 13% 10% - % Xyvsn 3 1B9
VaDtH 1J4 21 4C8 M% 29% 29% - % YtowFs .70 K 872 a
Valiant JO 8 12 39, M » ZmnUi 1J4 29 81
Vpoct 05T Mb 19. 19. Zondvn 29 12 15
21% 21%'
20% 20b
4% 4%-MB
IS 16%+ %
10% «J%
3ft &
16% 16%
•a •»- %
30% M% — %
12% 12%
»% B%+ %
17 17 + %
18% 15%- >
a 85 - %
W. 17%- %
23% a%
32% 32%
9% 9%— %
35% 38
M% 10% - %
38% 38% — %
«% M%— %
M% M%- %
21% 21b- %
Mb M%+ %
M% M -1b
U% 11
28 28b- %
22% 23%+ %
35% 35% + 1
44% 45 + %
13% 13% + %
9% 9%- %
28% 28%+ %
12% 12%
17b 17%- %
14% M%
14b Mb - b
10b 10% - %
21% 2l%— t
13% 13%- %
8b 8% »%- % -X-Roa ■
14 13b 13%- b Xksor
M 175 *4 Hb 23%
7M Mb Ub 14 — b
12 217 Mb 9b 9b — %
15 170 8% 3% 3%
2S29 9% 8% 9
7 30 8% 8% 8%
3 UB 3% 6 5%+ %
M 872 a 25% 25% — %
29 Mb 24 M - %
a 12 13b 13% 10%
l »'<*\ vll jii** «n Business?
Enjoy trading you* CompBokenimy copy of the F hamcial Times when
you're Maying. . .
. . . inluitialiiinigauhc
Hotel Cravat* Hofiday Inn* lotetcontinenta! Hotel, Hold
Resident
TOKYO - Moat Active Stocks
Tuesday 23 August 1988
Stocko Closing Change Stocks Cloning Change
Traded Prices on day Traded Prtcaa on daw
SumMuno Hasty StMn 885 +20 MOC 76J3m G8T -6
IbtauOisM OU 2541m 1.100 + 80 Kaiaal Electric
Mppon Steel 2373m 710 -B RaSway 1520m 2JH>
tcawoiaki Swot - ia.74m 748 41 Nippon Expraaa - 14.54m 1,480
MaaMo Start 17 JSm 1.150 -ID Fuji Heavy MJ8m 883
Refiway IBJOm ZBK +90
Nippon Expraea - 14.64m 1,480 -90
Fuji Heavy MJSm 883 +K
Koyp Softs — 1224m 1.070 + 70
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— ■■ ■ ■Eom p+'W Rii-onr** Nen-xtvmer ■
7 ' . : V.v. '.7-
ctm AT^riAL TIMES WEDNESDAY
AUGUST 24 1988
4pm prices August 23
NEW YORK STOCK EXCHANGE COMPOSITE PRICES
n
tOgh Low Sack
m
Ofta
Dkr.VW-E IHtaMgh LAW OnteCtoaw
- A-A-A -
Z7% H AAR s M 14 18 312 24 >2 M 2<1» + %
10 10 ACM a B20 10 10 10
12 >| 8% ACM*n nl^Os 11 593 lib 11 life* %
12*1 10%ACMSc nl28 11 SOS 10% 10% 10%
S8b 8% ACMSp n.l7a IS 574 94 D 0b
a Sll 27% 27 h 27% + I.
12 3% 35, 3*
832 3$ 9% 5%- %
0.4 48 21% 21b 21%
8 1116 43% 41% 41% -
02
27% 10% AOS
7% 2% AMCA
B% 3% All taO
2Bb 17 AM Id! pi 2
84% 28% AMR
24% IB ANR pi 112
11>t 9% ARX
70% 35% ASA S
22% 0% AVX .080
66% 40 AbtUb 120
27% 15% AMMO 1
15% 8% AonaC .40
» e% achme sa>
82
41
46 50
6 7 8'
20 Mb AdoEx 105a 20. S3 15% 15
10% 5%AdamMJ4 IS 16 a '
34% 7% AMD
*'* »% AMD pi
S6% . .
10% 4% Adobe
ZD 16% AdDb pi 124
21% 17% Adob pi 140
12% 5% Advwa 12
64% 39% AemLf 278
38% 20%AfllPDa 20
23% tl Allmans 48
4% 1% Atom
53% 29 AuPrd 120
27% 11% AlrtjFrl JB0
16% 6%Air0M
1 23% 23b 23%- %
10 78 7% 7% 7b- %
478 38% 38 38% - %
12 271 16% 18% 18%*- b
■427 43% 44b 45% + %
717 17% 18% M%- %
86 9 % 9% IV %
7 8% 7 + %
15% 15% 15%
18% 18% 1B%+ %
11% 11 11%- %
15 35 95 - %
7% 7% 7%
17% 17% 17%
20 % 20 % 20 %
8% »$ 8%
1 A 18 69 8%
5J 71584 47%
- . 48% 47 %- b
4 607 23% 24% 24% - %
62 92353 15% U% M%- %
32 4% 4% 4%- %
25
18!
«% W%
<% <$ -
II 1413 43b 41% 43 - b
21 106 15% 13% 18% + %
« 51 H% M 14 - %
a 10$ Airless* 220 1£ 10 SO 1B% 18% 18b- %
9% 7% AMP dftlCr 96 208 9% 9% 9%- %
2910 B1 90% 90b- %
97% BlbAJaPpT 9
100 86% AIsP pi 9.44
80% 78 AMP pi B.K
87 77 AloP pi B28
23% 12% AIKAir .«
38 14% Alberto JO
28% 12% AlbCulA 00
34 20% ARtnn ■ it
37% 18 Alcan a 48
n 15% AlcoStd .68
28% 15% AlexAb 1
59 34% AItoJt
82% 01% AllegCp
15% 2% vlAIgMI
95
W.
9.7
10.
1100 94 % 94% 94%- %
21070 84 82 84 -1-2%
... <100 82% 82% 82%
5 15 784 18% 18% 18% + %
10 17 17 31% 30% 30% - %
13 14 50 23% 23% 23% 1 %
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FINANCIAL TIMES WEDNESDAY AUGUST 24 1988
COMPOSITE PRICES
AMEX COMPOSITE PRICES
Mr.TM.IW
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OVER-THE-COUNTER
Nasdaq national market, 3pm prices August 23
11
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Saiaa Oooroa ara unoWctsLYaarfy Mgtn and Iowa railacx tba
pcnlmr 02 Make phaa ta aaiwnt weak. Out oat Oar tatoat
ftwSna day. Where a apOl or alert dhrtdaod amecrtifiB to 26
paraanl or more tan been paid, ma yuatm hlgb-only range and
■OvMand era ahpam to* ttw new a l e rt enly. UrUaae otberwlaa
n aiad, ratee gi avhland are annual dWOnr aamen a named on am
Meat declaration.
a dM dend alao xtraM. batanuaf tale o 4 dMdand plea atock
dMda w d. -G+tqtddattnB dhrtdanL cld-caHad, d-oew yearly tear,
e-dlrttad dadarad or paid h> pracadkip 12 momh*. ©-dividend
In Canadian fanda. aubiacne 18 % notwaatoanee lex. MMoeod
deetarod adtor apU+cv or (tart cOvidand. J-dMdeod paid Ala
year, emRMd, defmrad. or no adkm token at 1 a l a a t dMdand
waa d n*. bdMoeod dadarad or paM iMa year, an aoowmiiettve
Waua wMi dMdonda In pzraan. n-naw laaua In Aa past 52
weeks. The hlgh-Urw range begins wWt Aa start el tracSng.
nd-naxt dsy delivery. P/E prioa-aantlnaa redo. r-dMdend
dadarad or paM A praeatflng 12 moeAe.plua aaort dMdand.
a -atock spilt. DMdand* begin with data of epQL sla-aalas.
t-dMdand paid A stock A p tat art ag OmenAa. aa thnal a d cash
value on aa+O wtd a nd or a v d la Mbutlon data, u-new yearly Mgn.
v-tradtng ballad. vHn bertrupKy or receivership or being
raorgan ro ed under Aa Banknipiey Act or pecuridaa assumed
by such oempanisa. wd+OaMtwtad. s+Mta n taa ue d arw-MA
warranto, a n s d M da n d or ax-dgMa. sdtoHMMHaiTlbuAm- n+
without warranto, y a x dMdand and sales AhdL yld-yteld.
. . . at no extra chaise in Belgium, if
you live or work in the following
postal districts:
Brussels — - 1000 , 1010 , 1020 , 1030 ,
1040 , 1041 , 1048 , 1049 , 1050 , 1060 ,
1070 , 1080 , 1090 , 1100 , 1110 , 1120 ,
1130 , 1140 , 1150 , 1160 , 1170 , 1180 ,
1190 , 1200 , 1210 , 1310 , 1410 , 1420 ,
1600 , 1620 , 1640 , 1641 , 1800 , 1900 ,
1920 , 1930 , 1931 , 1940 , 1950 , 1960 ,
1970 , 1980 , 1981 , 1990 .
Antwerp — 2000 , 2008 , 2018 , 2 Q 2 Q,
2030 , 2040 , 2050 , 2060 , 2070 , 2080 ,
2100 , 2110 , 2120 , 2130 , 2153 , 2180 ,
2200 , 2210 , 2230 , 2232 , 2241 , 2600 ,
2610 , 2700 , 2710 .
Gent — 9000 , 9110 ,. 9820 , 9830 ,
9831 .
liege — 4000 , 4020 , 4200 , 4400 .
Leuven — 3000 , 3030 , 3044 , 2072 .'
Korfirijk — 8500 , 8510 , 8550 , 8640 .
Brqgge- — 8000 ^ 8200 .
qy Brussels (02) 513 2816
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FINANCIAL TIMES
Wednesday August 24 1988
AMERICA
Dow stands still as bonds
on economic news
Street
BONDS reacted positively to
two key economic releases yes-
terday while equities traded,
quietly in an extremely narrow
range, writes Janet Bush in
New York.
The Dow Jones Industrial
Average closed virtually
unchanged, down 0.89 points at
1,989.33 in volume of only 120m
shares.
Monday's Hall of more than
25 points also came in low vol-
ume with practically all the
selling pressure from futures-
related stock index arbitrage.
US Treasury bonds rallied
quite well yesterday. By late
trading, prices were quoted up
to point higher. The Trea-
sury's benchmark long bond
was quoted & point up for a
yield of 9.38 per cent.
The bond market was
encouraged by both durable
goods orders and consumer
prices figures. Consumer prices
rose a seasonally adjusted 0.4
per cent in July, towards the
lower end of expectations.
Although thin compared with
0.3 per cent increases in both
June and May and provided
evidence that inflation is creep-
ing slowly higher, bond traders
still seemed quite pleased.
This was partly because,
stripped of food and energy,
the increase was only 03 per
cent last month compared with
a 0.4 per cent gain in June.
Durable goods orders fell a
seasonally adjusted ? per cent
In July, a larger drop than
most had expected. In addition,
June's surprisingly large 9.4
per cent increase in orders was
revised down to a rise of 8.7
per cent
Bonds were given additional
help by tbe dollar, which
remained strong in spite of the
economic figures which were
marginally less inflationary
than expected and showed
slightly less strength in orders
than expected.
The dollar, after a brief dip
on the consumer prices figures,
rebounded in spite of another
round of central bank interven-
tion. At mid-session, the US
currency was quoted at
DM1.9125 compared with an
earlier low of DML8975.
The failure of the stock mar-
ket to rally along with bonds,'
particularly after Monday's fall
which gave it technical ground
to bounce, was disappointing.
Perhaps significantly, the
Dow index remained under the
2,000 level throughout the
morning session. Although
2,000 Is not regarded as an'
important technical level by
chartists, it has some psycho-
logical meaning for investors
who are already worried about
the market's disappointing per-
formance. The Dow is at its
lowest level since late May.
Among featured stocks was
Insalco, which added $% to 930.
The company originally
accepted a takeover offer
worth $29 a share from a group
including First Boston, but
said yesterday that it was in
discussions with another
potential buyer.
Burndy jumped $3% to $16%
on sews that it had asked its.
investment bankers to explore
alternatives for maximising
shareholder value, including
sale of all or part of the com-
pany.
Hyponex gained $2% to $32%
in over-the-counter trading
after the company said it had
agreed to merge with an acqui-
sition company controlled by O
M Scott & Sons.
Pansophic Systems fell $1%
to $13% after reporting net
income in its first quarter
ended July 31 of five cents a
share from 14 cents a year ear-
lier.
Deere & Co, largest US man-
ufacturer of farm equipment,
added $1% to $42% after
reporting third-quarter net
paming s up from 33 cents to
$1.14 a share.
.Canada
EUROPE
Dull, demoralised bourses
lack a sense of direction
ANXIETY over interest rates
and Wall Street's overnight
losses left most of Europe
demoralised yesterday as vol-
umes remained very thin. How-
ever, most markets ended
above their lows, unites Our
Markets Staff.
MIT. AW held up well thanks
to a buoyant banking and
insurance sector, hut trading
remained fairly thin after Mon-
day's low L80bn. The Comif
index finished just 1X23 lower
at 536.57.
Insurer Generali, which
accounts for about 12Vs per
cent of the market’s capitalisa-
tion, rose a farther L430 to
L93.380 in the run-up to its
rights issue next month. “Any
positive movements in this
stock are reflected in the mar-
ket's overall performance,"
said one analyst
Banco Ambrosiano rose L160
to L3.300 amid strong specula-
tion that a foreign bank is
building up a large stake.
There are also rhmours
Ambrosiano may be merged
with Banca Cattolica del
Veneto. thus benefiting from
the latter’s high profits. Banca
Commerciale eased L26 to
L2.599 in the wake of the US
Federal Reserve's decision to
request information on its bid
for Irving Bank.
FRANKFURT remained
stuck in a rut, with volume
still woefully low and trading
lacking direction. The over-
night fall in the Dow Jones
Industrial Average below 2,000
hit early sentiment, while the
weakness of the bond market
and the prospect of higher
domestic interest rates exacer-
bated the market's paralysis.
There was little reaction
when the Bundesbank failed to
lift the securities repurchase
rate, and many investors seem
to believe another rise in inter-
est rates is nonetheless on the
cards, possibly after the bank’s
council meets tomorrow.
London
INFLATION fears pushed Lon-
don lower following a higher,
than-expected second quarter
gross national product figure.
The FT-5E 100 index lost 14.4
to 1,817.9. International stocks
staged a small afternoon rally,
but most still ended lower.
Hie FAZ index lost 5.35 to
477.12 at midsession, reflecting
the early gloom. Prices ended
off their lows, however, with
tbe DAX real time index of 30
blue chips down 12.02 at
145&97. Volume was minimal
at DMl-5bn.
Bonds fell to their lowest lev-
els for 10 months, fait by the
weakness of the D-Mark and
losses in US Treasury bonds.
Use yield on the latest 1998 fed-
eral bond rose to 695 per cent
from 6A2 per cent
PARIS closed the August
trading account on a bearish
note, with volume still thin but
swelled by position-squaring.
Here, too, the preoccupation
was with interest rates, as
fears grew that the French
Government might be forced
into a rise in line with the
Bundesbank. The OMF 50
index ended the session 4.05
down at 348.48 after recovering
from its day's lows.
Midi continued to benefit
from its higher profits forecast
and plans for a bigger divi-
dend, adding FFr13 to FFr1,285.
In the food and drinks sec-
tor, Pernod lost FFr6 to
FFr1,104 after saying it held no
stake in Irish Distillers and did
not intend to acquire one. BSN,
which has been strong recently
on analysts’ upward revision of
earnings forecasts, shed FFr50
to FFr5,000.
ZURICH was again fairly
quiet, with no corporate news
to move the market, and the
Credit Suisse index eased 2.6 to
474.6.
Larger price changes were
restricted to minor companies.
“The big movers were all small
shares,” one analyst said,
pointing to sharp falls by small
insurers, which had risen last
week on speculative interest
In the banking sector, prices
dropped after a slight recovery
on Monday. Union Bank bear-
ers, which had gained SFi30
the previous day, fell SFrlO to
SFT34230.
AMSTERDAM weakened as
the dollar slipped, but closed
above its day's lows after a
firmer opening on Wall Street
The CBS all-share index lost
19 to 94.6.
Van Ommeren Ceteco, the
shipping and storage company,
lost 60 cents to FT 27.10 before
repenting a rise in first half
profits from FI 19.3m to FI
23£m. Steelmaker Hoogovens.
Are to release half year results
today, shed EL L60 to FI 56.
Major insurance companies,
which begin a spate of results
today with Amev’s first half
figures, declined. Amev lost 70
cents to FT 5L5Q.
BRUSSELS closed mixed to
lower in dull trading, as inves-
tors stayed away in spite of the
start of a new fortnightly cycle
in the forward market
Utilities were the only sector
to defir the slide, with holding
company Tractebel gaining
BFrlOO to BFr7,800 on volume
of 12,750 shares amid rumours
of a mystery buyer, and Inter-
com rising BFr20 to BFr3J60.
STOCKHOLM closed lower
in lacklustre trading as a
result of declines elsewhere.
Investors’ uncertainty pend-
ing next month’s election was
worsened by remarks from
Finance Minister Mr EjaQ-Olof
Feldt, who said it was not pos-
sible to lower Swedish interest
rates.
MADRID fell following
trends in Tokyo and New York
FT-ACTU ARIES WORLD INDICES
Caution restrains Manila’s buoyant twins
M anila’s two stock mar-
kets, which trade
identical stocks, are
among Asia's smallest hut
most buoyant bourses.
The Manila exchange' is the
larger and busier of the two.
. The markets halve been con-
MARKET PROFILE
dCH
. Tm U J IIP -I
Philippines
Before last October’s stock
market crash, the exchanges
had grown more than six-fold
over 18 months as foreign
Interest increased following
the removal of President Ferdi-
nand Marcos from power in
February 1986.
The markets, the Manila
stock ’Evr .h ang p and the Mak-
ati Stock Exchange, split in
1968 when the country’s two
dominant brokerage houses fell
out and went their own ways.
Hie exchanges have the same
market rgnltflHgnHmi but thev
run their own stock indices.
the reluctance of foreign inves-
tors to venture back into
Manila- Last month thy Manila
Composite index reached a
new high for the year of just
over 880, hut it has since fallen
back to 782 amid nervousness
about the political scene and
the latest oil-drilling aclwnHi.
It hit a low point of 727 Jn
April, with much of .the fall
then caused by the sharp drop
in copper prices. Mining shares
were badly affected and strong
rises in commercial indos-
trial stocks failed to reverse
the ti mid
Last year, share prices
readied a record high in June,
when the Manila index cHmhpd
to 1837.
A military coup *>mt nar-
rowly failed to topple President
Corazon Aquino that August
hit the market, which was fur-
ther battered by the global
crash in October.
Hie 139 listed shares on each
exchange have a market cant
talisation of pesos 66bn
<$3-2bn). The top 10 shares
account for 76 per cent of trad-
ing and the composite indices
cover tbe 25 stocks that indi-
vidually y— lff up tbe commer-.
rial /faflmdTini , mining end ^
indices.
STOCK market FACT CHART
MANILA
Trading takes place between
9 l 3Q am and 12.10 pm with no
after hours trading. There is a
negligible over-the-counter
market. .
Both exchanges retain
paper-based trading systems.
Before full computerisation
could take place, the two mar-
kets would probably have to
reunite - but no siah reconcil-
iation is in ti gh t.
Market capitalisation: peso® 66bn ($1«=pesM 20AO,
ei« pesos 34JJQ)
Number of shares Hated: 139
Top 10 stocks, percentage of nwwrc 78%
Trading hoof* Official - £30
Average dally turnover. 1888: pesos 80m (comwnea
total of Manila and Makati Mcftanges) index
Main IndfcMG Manila composite Index, Mated compose
SSrortSIerofindS (Manila composite): 782.45; 1938 Mgh:
880.77 (2S/7);1988 low. 727.42 (24/4)
Settlement: cash, within five days
talks
Makati' is nevertheless push-
ing ahead with preparations
for oomputerbased trading and
Is further abend than Mamin
thnng h still not far advanced.
Manila, meanwhile, has made-
more headway than Makati in
computerising records of trans-
actions.
TW (M a 1MMI SMk P rriM jW II
- ■ - “ -
Volumes have remained low
since October, with a combined
daily average in 1968 of pesos
80m — Manila with pesos 45m
and Makati with 1 pesos 35m.
When the market was
approaching its peak of L337
on July 20 last year, combined
daily trading volume was
about pesos 300m.
Apart from a sinall number
of traded companies that are
closely controlled by families,
most of the mfl T **** ! — about 90
per — is freely tradeable.
However, liquidity remains a
problem and is extremely low
in the smaller stocks. Cash set-
tlement is within five days,
when physical delivery of the 1
stocks must take place.
Under tbe Philippine consti-
tution, foreign ownership is
limited to 40 per cent of a com-
pany. As a result, most of tbe
larger companies have B
shies for foreign investors.
Foreigners may own up to 100
per cent of local companies if
they are engag^pnmarity ta
exporting or agribusiness, but
no such companies are cur-
rently listed.
Withholding taxes for corpo-
rations vary from 20 per cent
- for Hong Kong investors -
to 35 per cent for most others.
Next week: Tel Aviv
St#* 7 **
Richard Gonriay
ASIA PACIFIC
ivau. A
SHARE prices posted a loss in
quiet Toronto trading as fears,
of rising interest rates side-
lined investors.
The composite index fell 9J34
to 3.242.02. Declines led
advances by 442 to 245 on turn-
over of 21.4m shares. Falling
gold issues led the retreat
Trading bedevilled by interest rate worries
Tokyo
ANOTHER sharp decline in
Tokyo yesterday followed the
overnight fall in the Dow Jones
Industrial Average below the
2,000 level, writes Mkftiyo Nak~
canoto in Tokyo.
Tbe Nikkei average fell
159.23 to 27,919.95, dropping
below 28,000 for the first time
in five trading days. Volume
was very thin at 531m com-
pared with Monday's already
weak 631m shares. The Nikkei
moved between a high of
28,032.49 and a low of 27.85L49.
Declines led advances by 587 to
254 and 185 issues were
lmnhawg ad.
Later in London, shares
slipped further, with the ISE/
Nikkei 50 index falling 4^0 to
L839JL2.
In Tokyo, uncertainty about
possible higher interest rates
abroad and concern that the
Japanese Government may
decide to tighten rules on capi-
tal gains taxes continued to
cast clouds over the market
No particular sector showed
enough strength to give the
market momentum and only
issues backed by specific incen-
tives saw buying interest Fuji
Heavy Industry, which was
traded in heavy volume of
14J28m shares, rose Y35 to Y863
on the back of its defence-re-
lated business. Fuji Heavy is
popular because of its promis-
ing space-related business.
Sumitomo Heavy Industries,
the volume leader at 64.58m
shares, also rose Y20 to Y895.
The company has been popular
in the past few weeks since
announcing plans for a
high-speed ship powered by a
superconductor motor.
Japan Steel Works gained
Y61 to Y666 on the back of its
prop er ty holdings. It plans to ,
redevelop tiie site of its factory
in suburban Tokyo. The com-
pany, which has defence-re-
lated businesses, also benefited
from the strength in Sumitomo
Heavy’s share price.
Nisshin Steel, the fifth most
heavily traded issue with
17.85m shares, lost Y10 to
YL.150. One of the leading steel
companies, Nisshin had been
actively bought recently
because of its relatively low
share price.
Keisei Electric Railways,
which has risen strongly on
speculation that its subsidiary.
Oriental Land, is to go public,
continued to attract interest It
rose Y90 to Y2JJ10.
. Mitsubishi (hi, another Issue
that has been bought sporadi-
cally in the past few weeks,
gained Y60 to Y1.100- a was tbe
second most heavily traded
issue with a volume of 25.41m
shares. Mttsuhishi’s popularity
stems from speculation that
Saudi Arabia is i n terest e d in
buying a stake in the company
and from expectations that the
industry as a whole win soon
see restructuring moves.
Oki Electric, which rose on'
Monday on news that it is
planning to begin mass produc-
tion of 4-megabit memory chips
next year, advanced Y20 to
Y1430. Other electricals were
weaker. Sony lost Y140 to
Y6910 while NEC decreased by
Y60 to Y2.150-
Companies in the tinaru-ini
sector remained weak. Sumi-
tomo Bank lost Y50 to Y3^30
while Fuji Bank dropped by
Y30 to Y3.150. The weakness of
financials steins mainly from
uncertainty about interest
rates. Securities houses, how-
ever, declined on news that
many expect reduced profits in .
the year to September. Daiwa
Securities lost Y70 to Y2.810
while Nlkko Securities shed
Y40 to YL83Q.
Steels were also weaker. Nip-
pon Steel was down Y8 to Y719
on the third, largest volume of
20.78m shares..
The band market was hit by
the weaker yen and by stable
short-term Interest rates.
Investors were also concerned
about a possible increase in
West German interest rates.
The yield on the benchmark
105th government bond rose to
5190 per cent from 5115 per
cent on Monday.
Following Wall Street’s fell,
the Osaka market slipped back
with the OSE average down
16745 at 27,06511. Volume was
thin at 43.20m shares, down
2pm from Monday. Sumitomo
Heavy, the volume leader in
Osaka at &85m shares, rose
Y25 toY900-
Roundup .
THE TREND in Asia Pacific
markets yesterday was down-
wards, with Australia falling
particularly sharply.
AUSTRALIA fell steeply in
late trading before the
announcement of the Federal
Budget l««t wight.
E unities closed near their
day’s lows in *htw trading after
the earlie r decline in Tokyo.
The All Ordinaries index
dropped 1&6 to 1,629-5 an low
turnover dTSm, slightly down
on Monday’s 81m.
The industrial sector and
bine chips saw the steepest
declines. Market leader BHP
fell 10 cents to A$8.40 and
News Corporation dropped 25
cents to AS10.40.
. Profit-taking, following last
week’s rises~Mt banks and spe-
cial situation stocks. Among
banks, Westpac and National.
Australia each dropped 8 .cents
to A$5.84 and AS6.42.
Bond Corporation, the brew-
frig, media mid property group,
was unchanged- at A$k20 after
reporting trebled profits the
previous day^MIM, the multi-
national resources group
which announced a fourfold
increase in profits on Monday,
dropped 4 cents to AS2.14.
SINGAPORE slipped for the
10th consecutive day in quiet
trading, but bargain hunting
lifted shares off early lows. Tbe
market had fallen in the morn-
tog following declines on Wall
Street and other major markets
the previous day.
Tbe Straits Times industrial
index fell 8.71 to close at
1,067.02 after earlier losing
21.63-
Activity continued to be
dominated by Malaysian specu-
lative, property and low-priced
stocks.
, . j- i
rv**vn*
SOUTH AFRICA
GOLD share prices in Johan-
nesburg closed slightly higher
on. a firmer bullion price.
Other stocks woe mixed fol-
lowing the release of a trade
surplus figure double that of
last month at R973.5nz, but
still well down on July 1987,
start
The
da?* *4*
Plaisterers Hall, City of London
19, 20 &.21 September, 1988
j r
This three-day Seminar provides an overview of the traditional operations of the
City of London together with an examination of its newer markets and activities.
Speakers will include:
Philip Warland
Head of Information Division
Bank of England
Jointly compiled by the Financial Times, Goldman, Sachs & Co., and Wood Mackenzie & Co.
Ltd., in conjunction with the Institute of Actuaries and the Faculty of Actuaries
NATIONAL AND
EEG1DNAL MARKETS
TUESDAY AUGUST 23 1988
MONDAY AUGUST 22 1988
DOLLAR INDEX
Mark Boleat
Director- General
The Building Societies Association
Martin Hall
Director of Policy and Manning
The Securities Association
Director of Public Policy Studies
The International Stock Exchange
-David Malcolm
Deputy Group General
Ma nager
Royal Insurance pic-
Flgures in parentheses US
show number of stocks Dollar
per grouping Index
Australia (87) 151.28
Austria (16) 84.82
Belgium 163) 109.73
Canada (128) 117.37
Denmark (39) 12134
Finland 1261 123.78
France (129) 88.76
West Germany (100) 72.08
Hong Kong (461 102.94
Ireland (18) 131.20
Italy (102) 71.79
Japan (456) 162.60
Malaysia (36) 140.60
Mexico (13) 149.66
Pound
Sterling
Index
Local
Currency
Index
Pound
Sterling
Index
Local .
Currency
Index
Year
ago
(approx)
158.62
97.19
133.49
139m
120.97
Chris Tracey
Joint Managing Director
Fleming International Investment
Management Limited
Investment Director
Save & Prosper Group Limited
The RtHonJohn Smith, qc,mp
Shadow Chancellor of the 1 Exchequer
Peter Rawlins
Managing Director
R W Stiirge & Co
Derek TuUett
Chairman
TuUett & Tokyo Forex
International Limited
I
Christopher Johnson
Chief Economic Adviser
Lloyds Bazik Pk
Francesca Edwards
Associate Director •
J P Morgan Securities Ltd
John Matthews
Executive Director
County NatWest Limited